Homework Answers
28) Contribution margin ratio = (Sales-Variable cost)/Sales = (50-40)/50 = 20%
Break even = Fixed cost/Contribution margin ratio = 200000/.20 = $1000000
Required sales = (200000+120000)/.20 = $1600000
29) Break even unit = 200000/10 = 20000 Unit
Margin of safety units = 24000-20000 = 4000 Units
Margin of safety dollars = 4000*50 = $200000
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