Basic Break$-$Even Calculations

Suppose that Larimer Company sells a product for $$24.$ Unit costs are as follows:

Calculate the variable cost per unit and the contribution margin per unit.

Unit variable cost

$$3\mathrm{.}00$

Unit contribution margin

Total fixed factory overhead is $$26,500$ per year, and total fixed selling and administrative expense is $$15,260.$

Required:

Calculate the variable cost per unit and the contribution margin per unit.

Calculate the contribution margin ratio and the variable cost ratio.

Feedback

Check My Work

Sum all variable unit costs to obtain unit variable cost and subtract unit variable cost from price to obtain unit contribution margin.

Calculate the break$-$even units.