Question

Solomon Company reported the following data regarding the product it sells: Sales price Contribution margin ratio Fixed costs s 60 259 $360,000 Required Use the contribution margin ratio approach and consider each requirement separately. a. What is the break-even point in dollars? In units? b. To obtain a profit of $30,000, what must the sales be in dollars? In units? c. If the sales price increases to $75 and variable costs do not change, what is the new break-even point in dollars? In units? a Break-even point in dollars Break-even point in units b. Sales in dollars Sales in units c Break-even point in dollars Break.even point in units

Answer 1

S.No.	Particulars	Calculation	$ / Units
a	Break-even point in dollars	360,000/25%	1,440,000
	Break-even point in units	360,000/(60*25%)	24,000
b	Sales in dollars	(360,000+30,000)/25%	1,560,000
	Sales in units	(360,000+30,000)/(60*25%)	26,000
c	Break-even point in dollars	360,000/25%	1,440,000
	Break-even point in units	360,000/(75*25%)	19,200