Question

Campbell Corporation sells products for $44 each that have variable costs of $9 per unit. Campbell's annual fixed cost is $794,500. Required Use the per-unit contribution margin approach to determine the break-even point in units and dollars. Break-even point in units Break-even point in dollars

Answer 1

Selling price per unit = $44

Variable cost per unit = $9

Fixed costs = $794,500

Contribution margin per unit = Selling price per unit- Variable cost per unit

= 44-9

= $35

Break even point in units = Fixed costs/ Contribution margin per unit

= 794,500/35

= 22,700 units

Contribution margin ratio = Contribution margin per unit/ Selling price per unit

= 35/44

= 79.5454545%

Break even point in dollars = Fixed costs/Contribution margin ratio

= 794,500/79.5454545%

= $998,800

Break even point in units	22,700 units
Break even point in dollars	$998,800

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