Chillmax Company plans to sell 3,500 pairs of shoes at $60 each in the coming year. Variable
Question:
Chillmax Company plans to sell 3,500 pairs of shoes at $60 each in the coming year. Variable cost is 35% of the sales price; contribution margin is 65% of the sales price. Total fixed cost equals $78,000 (includes fixed factory overhead and fixed selling and administrative expense).
Required:
1. Calculate the sales revenue that Chillmax must make to break even by using the breakeven point in sales equation.
2. Check your answer by preparing a contribution margin income statement based on the break-even point in sales dollars.
Contribution MarginContribution 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...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Managerial Accounting The Cornerstone of Business Decision Making
ISBN: 978-1337115773
7th edition
Authors: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Question Posted: