Question

Exercise 18-9 Contribution margin and break-even LO P2 10 Blanchard Company manufactures a single product that sells for $185 per unit and whose total variable costs are $148 per unit. The company's annual fixed costs are $469,900. points Skipped (a) Compute the company's contribution margin per unit. eBook Hint Print Contribution margin (b) Compute the company's contribution margin ratio. Choose Numerator: T References Choose Denominator = Contribution Margin Ratio Contribution margin ratio (c) Compute the company's break-even point in units. Choose Numerator: Choose Denominator: = Break-Even Units = Break-even units (d) Compute the company's break-even point in dollars of sales. Choose Numerator: Choose Denominator: = Break-Even Dollars = Break-even dollars

Answer 1

Ans:

(a)

Selling price per unit	$ 185
Less: variable cost per unit	$ -148
Contribution per unit	37

(b)

Choose numerator	Choose Denominator	Contribution margin ratio
Contribution per unit	Selling price per unit
$ 37	$ 185	20%

(c)

Choose numerator	Choose Denominator	Break even units
Annual fixed cost	contribution per unit
$ 469900	$ 37	12700

(d)

Choose numerator	Choose Denominator	Break even Dollars
Annual fixed cost	Contribution margin
$ 469900	20%	$ 2,349,500