Question

The budgets of four companies yield the following information: B Click the icon to view the budget information for the four companies.) Read the requirements. Requirement 1. Fill in the blanks for each missing value. (Round the contribution margin per unit to the near minus sign or parentheses to enter an operating loss.) Nantz Smith Whitman $ 2,900,000 Net Sales Revenue Variable Costs Eastman 462,500 277,500 216,000 88,000 168,000 158, 100 $ $ 91,000 Fixed Costs Operating Income (Loss) Units Sold Contribution Margin per Unit Contribution Margin Ratio 399,400 200,000 2.90 16,000 $ $ 74.00 $ 80 % 17.00 40 % Requirements 2. and 3. Which company has the lowest breakeven point in sales dollars? What causes the low bre point? Begin by showing the formula and then entering the amounts to calculate the breakeven point in sales dollars for eac Am imate ner hvert the holen in the resort soin de tothon Choose from any list or enter any number in the input fields and then continue to the next question. Type here to search

Answer 1

1.

	Nantz	Smith	Eastman	Whitman
Net sales revenue	$2,900,000	$440,000 [88,000/20% (100%-80%)]	$462,500	$263,500 [(158,100/60% (100%-40%)]
Variable costs	2,320,000 [(2,900,000-580,000 (200,000*$2.90]	88,000	277,500	158,100
Fixed costs	180,600 (580,000-399,400)	168,000	216,000	14,400 ($263,500-158,100-91,000)
Operating income (loss)	399,400	184,000	(31,000)	91,000
Units sold	200,000	16,000	2,500 ($462,500-277,500/$74)	6,200 ($263,500-158,100/$17)
Contribution margin per unit	$2.90	$22 (440,000-88,000/16,000)	$74	$17
Contribution margin ratio	20% ($580,000/$2,900,000*100)	80%	40% [($462,500-277,500)/$462,500*100]	40%

2.

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

Nantz = $180,600 / 20% = $903,000

Smith = $168,000 / 80% = $210,000

Eastman = $216,000 / 40% = $540,000

Whitman = $14,400 / 40% = $36,000

Whitman has the lowest break even point , primarily due to lower fixed cost.