1
Variable cost per unit = [Selling price per unit X (1- CM
ratio)]
=> [$50 X (1-30%)]
=> $50 X 70%
=> $35 (Ans)
2
Particulars | Amount ($) |
Sales revenue ($50 X 15000 units) |
750000 |
Less: Variable cost ($35 X 15000 units) |
(525000) |
Contribution margin | 225000 |
Less: Fixed cost | (200000) |
Profit | $25000 |
Yes, the company is better off with this plan as by selling 15000 units, the company will earn a profit of $25000
3
Breakeven point (units) = [Fixed cost / (selling price per unit
- Variabe cost per unit)]
=> [$200000 / ($50 - $35)]
=> ($200000 / $15)
=> 13333 units (Ans)
(If there are any questions, kindly let me know in comments. If the solution is to your satisfaction, a thumbs up would be appreciated. Thank You)
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