Oak Bucket Co., a manufacturer of wood buckets, had the following data for 2013: Sales ...............2,600 units

Question:

Oak Bucket Co., a manufacturer of wood buckets, had the following data for 2013:

Sales ...............2,600 units

Sales price ............$40 per unit

Variable costs ..........$16 per unit

Fixed costs ...........$19,500

Instructions

(a) What is the contribution margin ratio?

(b) What is the break-even point in dollars?

(d) If the company wishes to increase its total dollar contribution margin by 30% in 2014, by how much will it need to increase its sales if all other factors remain constant?

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...