A company wants to manufacture a microchip for diversifying into a different product line.

The following information is made available.

Current Selling Price, per unit $$7\mathrm{.}55$

Direct Materials, per unit $$2$

Direct Labour, per unit $$1$

Variable manufacturing overhead, per unit $$1\mathrm{.}35$

Variable operating expense, per unit $$1\mathrm{.}20$

Fixed Manufacturing Overhead $ $2\mathrm{.}5$ Mn

Fixed Operating Expense $ $1\mathrm{.}5$ Mn

$1$ When is the firm going to achieve break$-$even?

$2$ Calculate the contribution margin.

Answer rating: 100% (QA)

1 BreakEven Point Calculation The breakeven point is the level of sales at which total revenues equa... View the full answer