Felde Bucket Co., a manufacturer of rain barrels, had the following data for 2016: Sales .......................... 2,500

Question:

Felde Bucket Co., a manufacturer of rain barrels, had the following data for 2016:
Sales .......................... 2,500 units
Sales price ................... $40 per unit
Variable costs ............... $24 per unit
Fixed costs .................. $19,500
Instructions
(a) What is the ratio?
(b) What is the break-even point in dollars?
(c) What is the margin of safety in dollars and as a ratio?
(d) If the company wishes to increase its total dollar by 30% in 2017, by how much will it need to increase its sales if all other factors remain constant?
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...