Question

Big Foot produces sports socks. The company has fixed expenses of $110,000 and variable expenses of $1.10 per package. Each package sells for $2.20. Read the requirements compute contribution Begin by identifying the formula to compute the contribution margin per package. The package. (Enter the amount to the nearest cent.) Sales price per unit Variable cost per unit Contribution margin The contribution margin per package is $ 1.10 Compute the contribution margin ratio. (Enter the ratio as a whole percent.) Begin by identifying the formula to compute the contribution margin ratio. Contribution margin per unit Sales price per unit Contribution margin The contribution margin ratio is 50% Requirement 2. Find the breakeven point in units and dollars. Begin by identifying the formula to compute the breakeven sales in units using the contribution margin approach Fixed expensos - Operating income ) Contribution margin por unit Break in units The breakeven point in units is Enter any number in the edit fields and then click Check Answer.

Answer 1

Dete * Calculation :- Contribution margin & Contribution margin matio are Correctly Calculated we start with ree auirement ? Real 2 Break even point in units :- A CFixed Expenset operating Income) /cmper una (110.000 +O) 11:10 = 100000 units - Break even Sales in unit = Breakeven point in dollars: (Fixed Exp+ operating Income) /cm Ratio - Breakeven Sale ing = (110,000+o) / 50% - Breakeven Sale in collar 110,000 1500 = Breakeven Sale in collar 9220000 = Breakeven Sale in dollar In above requirement no target operatine Income was given in Question so we take it aso. If any target profit is given it is to be added with fixed expense to calculate Breakeven point.