In 2015, Demuth Company had a break-even point of $350,000 based on a selling price of $5

Question:

In 2015, Demuth Company had a break-even point of $350,000 based on a selling price of $5 per unit and fixed costs of $112,000. In 2016, the selling price and the variable cost per unit did not change, but the break-even point in- creased to $420,000.
Instructions
(a) Calculate the variable cost per unit and the contribution margin ratio for 2015.
(b) Calculate the increase in fixed costs for 2016.c
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...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Managerial Accounting Tools for Business Decision Making

ISBN: 978-1118856994

4th Canadian edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly

Question Posted: