Question

Exercise 18-9 Contribution margin and break-even LO P2 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 () Compute the company's contribution margin per unit Contribution margin (b) Compute the company's contribution margin ratio Choose Numerator: - Contribution Margin Ratio Contribution margin ratio 1) Compute the company's break even point in units Choose Numerator Choose Denominato Break Even Units Break-even units (c) Compute the company's break even point in dollars of sales. Choose Numerator: Choose Denominator - Break Even Dollars Break-even dollars

Answer 1

a]	Selling price per unit	$ 185
	Total variable costs per unit	$ 148
	Contribution margin per unit	$ 37
b]	Choose Numerator	/	Choose Denominator	=	Contribution margin ratio
	Contribution margin per unit	/	Selling price per unit	=	Contribution margin ratio
	$    37.00	/	$    185.00	=	20.00%
c]	Choose Numerator	/	Choose Denominator	=	Breakeven units
	Annual fixed costs	/	Contribution margin per unit	=	Breakeven units
	$ 4,69,900	/	$ 37	=	12700
d]	Choose Numerator	/	Choose Denominator	=	Breakeven Dollars
	Annual fixed costs	/	Contribution margin ratio	=	Breakeven Dollars
	$ 4,69,900	/	20.00%	=	$ 23,49,500