Scott Confectionery sells its Stack-o-Choc candy bar for $0.80. The variable cost per unit for the candy

Question:

Scott Confectionery sells its Stack-o-Choc candy bar for $0.80. The variable cost per unit for the candy bar is $0.45; total fixed costs are $175,000.

Required

a. What is the contribution margin per unit for the Stack-o-Choc candy bar?

b. What is the contribution margin ratio for the Stack-o-Choc candy bar?

c. What is the breakeven point in units? In sales dollars?

d. If an increase in chocolate prices causes the variable cost per unit to increase to $0.55, what will happen to the breakeven point?

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...