# Question

Volodya Company reported the following data regarding the product it sells:

Sales price ............ $20

Contribution margin ratio ...... 40%

Fixed costs ............ $900,000

Required

Use the contribution margin ratio approach and consider each requirement separately.

a. What is the break-even point in dollars? In units?

b. To obtain a profit of $360,000, what must the sales be in dollars? In units?

c. If the sales price increases to $24 and variable costs do not change, what is the new break-even point in dollars? In units?

Sales price ............ $20

Contribution margin ratio ...... 40%

Fixed costs ............ $900,000

Required

Use the contribution margin ratio approach and consider each requirement separately.

a. What is the break-even point in dollars? In units?

b. To obtain a profit of $360,000, what must the sales be in dollars? In units?

c. If the sales price increases to $24 and variable costs do not change, what is the new break-even point in dollars? In units?

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