Question: EXERCISE 2: CONTRIBUTION MARGIN, PV RATIO, AND BREAK-EVEN POINT A company expects to sell 75,000 widgets at a price of $10.00. The unit variable costs

EXERCISE 2: CONTRIBUTION MARGIN, PV RATIO, AND BREAK-EVEN POINT A company

EXERCISE 2: CONTRIBUTION MARGIN, PV RATIO, AND BREAK-EVEN POINT A company expects to sell 75,000 widgets at a price of $10.00. The unit variable costs are estimated at $8.00, and the fixed costs are estimated at $125,000. On the basis of this information, calculate the following: 1. Contribution margin 2. PV ratio 3. Revenue break-even by using the PV ratio 4. Profit generated EXERCISE 3: BREAK-EVEN POINT IN UNITS AND IN REVENUE Using the information in Exercise 1, if rent were increased by $25,000 and variable costs and unit selling price remained unchanged, what would be the new PV ratio and break-even point in units and in revenue

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