# Craig Company Inc. earns a contribution margin ratio of 36% on its main product sold at $120

## Question:

Craig Company Inc. earns a contribution margin ratio of 36% on its main product sold at $120 per unit. Assume that the annual break-even point is 80,000 units.

**Required:**

1. Compute the annual fixed costs.

2. What is the contribution margin for every unit sold beyond the break-even point?

Contribution MarginContribution 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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**Related Book For**

## Introduction to Managerial Accounting

**ISBN:** 978-1259105708

5th Canadian edition

**Authors:** Peter C. Brewer, Ray H. Garrison, Eric Noreen, Suresh Kalagnanam, Ganesh Vaidyanathan