1. (a). What is break even point, explain with a good example and a diagram (2 marks)

(b). A company sells a product at $35 per unit. The variable cost for the product is $30 per unit and its fixed cost is $70,000 (3 marks)

i, what is the quantity the firm must sell to break even

ii what is the break even point in dollars

2. (a). Explain the meaning of contribution margin with a good example (2 marks)

b). A vehicle spare parts dealer has the following information in her operating budget. Sales were $1,020.000 with fixed costs for the period of $160,000. The total variable cost was $581,400. (3 marks)

Find:

i, The contribution margin

ii Contribution rate

iii Break even point in sales dollars