Belanov Company reported the following data regarding the one product it sells:
Sales price .......... $30
Contribution margin ratio..... 20%
Fixed costs .......... $540,000 per year
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 $90,000 profit, what must the sales be in dollars? In units?
c. If the sales price increases to $32 and variable costs do not change, what is the new break-even point in units? In dollars?