Question

Sarafine, Inc. sells a single product for $21. Variable costs are $7 per unit and fixed costs total $182,000 at a volume leve
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Answer #1

Answer: $273,000

Contribution margin per unit
Sales per unit $21 per unit
Less: Variable cost per unit $7 per unit
Contribution margin $14 per unit

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Contribution margin ratio
Contribution margin per unt / Sales per unit = Contribution margin ratio
$14 / $21 = 66.66666667%

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Break-even sales in dollars
Numerator: / Denominator = Break-Even sales
Fixed costs / Contribution margin ratio = Break-Even sales
$182,000 / 66.666667% = $273,000
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