Question

Starlight Co. makes and sells only one product. The unit contribution margin is $10 and the break-even point in unit sales is

A recent income statement of McClennon Corporation reported the following data: Units sold Sales revenue Variable costs Fixed

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Answer #1

8) D. $250,000

Unit contribution margin x Breakeven units = Total Fixed costs

$10 x 25,000 = $250,000

9) B. 8,500 units

Contribution margin per unit = ($11,070,000 - $6,560,000) / 8,200 = $550

Units to sell to earn desired profit = (Fixed costs + Desired profit) / Contribution margin per unit

Units to sell to earn desired profit = ($2,700,000 + $1,975,000) / $550

Units to sell to earn desired profit = 8,500 units

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