Detienne Company manufactures and sells one product for $10 per unit. The unit contribution margin is 40% of the sales price, and fixed costs total $105,000. 1. Using the equation approach, compute: a. The break-even point in sales dollars and units b. The sales volume (in units) needed to generate a profit of $30,000 c. The break-even point (in units)

Chapter 21, Practice Exercises #34

Detienne Company manufactures and sells one product for $10 per unit. The unit contribution margin is 40% of the sales price, and fixed costs total $105,000.

1. Using the equation approach, compute:

a. The break-even point in sales dollars and units

b. The sales volume (in units) needed to generate a profit of $30,000

c. The break-even point (in units) if variable costs increase to 80% of the sales price and fixed costs increase to $125,000

2. See if you can recompute the solutions to 1(a), 1(b), and 1(c) in one equation step using either the contribution margin ratio or the contribution margin dollars per unit.

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...