Calculating Contribution Margin, Contribution Margin Ratio, Break-Even Point
CoverUp, Inc., produces one model of seat cover. Partial information for the company follows:
Number of seat covers produced and sold Total costs | 1,500 | 1,700 | 2,100 |
Variable costs | $ ? | $ ? | $15,750 |
Fixed costs per year | ? | ? | ? |
Total costs | ? | ? | ? |
Cost per unit | |||
Variable cost per unit | ? | ? | ? |
Fixed cost per unit | ? | ? | ? |
Total cost per unit | $31.00 | ? | ? |
Required:
1.Complete the table.
2.Calculate CoverUp’s contribution margin ratio and its total contribution margin at each sales level indicated in the table assuming the company sells each seat cover for $30.
3.Consider the contribution margins just calculated and total fixed costs for the company. Determine whether CoverUp’s break-even point will be more or less than 1,500 units.
4.Calculate CoverUp’s break-even point in units and sales dollars.
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