Case 1: In a business, the contribution margin per unit of its product is $10, variable cost
Question:
Case 1: In a business, the contribution margin per unit of its product is $10, variable cost per unit is $15 and the break-even point is 13,700 units.Based on the above, what are the fixed costs associated with the business? *
$137,000
$68,500
$205,500
None of the above
Based on the above, what is the contribution margin ratio? *
50%
40%
66%
None of the above
Case 2: Loulia makes cupcakes, which sell for $5 each and which cost $3 each to make. The owner estimates that her fixed costs amount to approximately $1,000 per week.
Based on the above, how many cupcakes must Loulia sell in a week in order to break-even? *
200 units
500 units
125 units
None of the above
Based on the above, what level of sales must she achieve every week in order to break-even? *
$1,500
$2,500
$1,000
None of the above
Case 3: Lake Sales had $1,800,000 in sales last month. The contribution margin ratio was 40% and Net Income was $155,000. What is Lake's break-even sales volume? *
$1,080,000
$1,412,500
$720,000
None of the above
University Physics with Modern Physics
ISBN: 978-0321501219
12th Edition
Authors: Hugh D. Young, Roger A. Freedman, Lewis Ford