Question

In 2019, Oriole Company had a break-even point of $362,000 based on a selling price of $8 per unit and fixed costs of $108,600. In 2020, the selling price and the variable costs per unit did not change, but the break-even point increased to $467,000. . Your answer is incorrect. Compute the variable costs per unit and the contribution margin ratio for 2019. (Round Variable cost per unit to 2 decimal places, e.g. 2.25 and Contribution margin ratio to 0 decimal places, e.g. 20.) Variable costs per unit $ Contribution margin ratio % e Textbook and Media Save for Later Attempts: 2 of 7 used Submit Answer (b) The parts of this question must be completed in order. This part will be available when you complete the part above.

Answer 1

(a) Variable Cost per Unit Contribution margin ratio $ 5.60 30% Working Notes: In the Year 2019 Break even Point = Fixed Cost/contribution margin ratio Contribution margin ratio = Selling Price per unit /Variable cost pe unit $362,000 = $108,600/Contribution margin ratio Contribution margin ratio = $108,600/$362,000 = 30% Contribution margin per unit = Selling price per unit * Contribution margin ratio = $8*30% = $2.4 Contribution margin per unit = Selling Price per unit - Variable cost pe unit $2.4 = $8 - Vraiable cost per unit Variab;e Cost per unit = $8-$2.4 = $5.60