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3-3 Breakeven analysis (LO 1) Julianna Abdallah owns and operates FirstCakes, a bakery that creates personalized birthday cak

Required a. What is FirstCakes contribution margin per unit? b. What is FirstCakes monthly breakeven point in units? c. Wha

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Answer #1

Total units sold=(840,000/40)=21,000

Contribution margin per unit=(210,000/21000)=$10 per unit

Breakeven=Fixed expenses/Contribution margin

=(112,000/10)=11200 units

Contribution margin ratio=Contribution margin/Sales

=(10/40)=25%

Breakeven sales=Fixed expenses/Contribution margin ratio

=(112,000/0.25)=$448,000

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