The following information relates to the only product sold by Harper Company: Sales price per unit .
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The following information relates to the only product sold by Harper Company:
Sales price per unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24
Variable cost per unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Fixed costs per year . . . . . . . . . . . . . . . . . . . . . . . . ... 240,000
a. Compute the contribution margin ratio and the dollar sales volume required to break even.
b. Assuming that the company sells 75,000 units during the current year, compute the margin of safety sales volume (dollars).
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...
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Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
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