Question: If Fixed Costs are $20,000 and Variable Cost per unit is $1.50 and we sell our product for $5 . 00 per unit, Calculate the

If Fixed Costs are $20,000 and Variable Cost per unit is $1.50 and we sell our product for $5.00 per unit, Calculate the following (show your work!):

1.Contribution Margin per Unit (CMPU)
2.Contribution Margin Ration (CMR)
3.Break Even in Units (BEP)
4.Break Even in Sales (BES)
5.How many units do we need to sell if we want Net Income to be $25,000?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Q:

PROJECT TWO: EVALUATING BUSINESS ALTERNATIVES Purpose: Identify which new business is more feasible of the two options below, based on break-even analysis and additional research. You will become...

Q:

Business Decision Case The following total cost data are for Ralston Manufacturing Company, which has a normal capacity per period of 400,000 units of product that sell for $18 each. For the...

Q:

1. Which of the following can influence a company's pricing decisions? A) Manufacturing costs. B) Competitors. C) Customer demand. D) Pricing laws. E) All of the above. 2. Which of the following is...

Q:

East Chestnut Regional Health System Case Study:Breakeven Analysis Worksheet Breakeven Analysis in economics, marketing, and cost accounting refers to the point at which total cost and total revenue...

Q:

Break-even analysis tells you how many units of a product must be sold to cover the fixed and variable costs of production. The break-even point is considered a measure of the margin of safety....

Q:

Business Decision Case The following total cost data are for Ralston Manufacturing Company, which has a normal capacity per period of 400,000 units of product that sell for $18 each. For the...

Q:

11. Sunk costs are: a. relevant for decision making b. Not relevant for decision making c. cost to be incurred in future d. future costs 12.Budgeted sales of X for March are 18000 units. At the end...

Q:

Sensitivity analysis is often used in the context of financial modeling or decision-making under uncertainty, among other fields. It assesses the risk or uncertainty of various variables in a model...

Q:

1. Use your plan of action to solve each problem found in Appendix A, clearly outlining the procedures used, providing a concise explanation of each step, labeling relevant formulas, and showing...

Q:

Mendburg, Inc. is a consulting firm that offers optimal legal solutions. It allocates indirect costs using a single predetermined overhead allocation rate with direct labor hours as the allocation...

Q:

British Airways, Plc. (BA), a U.K. company, prepares its financial statements according to International Financial Reporting Standards. BA's annual report for the year ended March 31, 2009, which...

Q:

Treasury spot interest rates are as follows: Maturity (years) 1 2 3 4 Spot rate (EAR) 1.6% 2.8% 3.5% 4.5% What is the price of a risk-free zero-coupon bond with 3 years to maturity and a face value...

Q:

Interest on a note payable is calculated as: Principal Interest Rate. Group startsTrue or False

Q:

What targeting strategy would you recommend that MJA, Inc. to adopt? Explain your reasons.

Q:

1 The CIPD now pays particular attention to business skills. Do you think it is right that HR managers should have such broad- based skills? In a report prepared by Rajan and Chapple (2001), based on...

Q:

=+5. Have a look at the Web site of the campaign What Would Jesus Drive? (http://www.whatwouldjesusdrive.info/intro.php). If he were alive today, what car would Jesus drive? Why?

Q:

1 W hat lessons might be taken from SASs example and applied in other organisations? SAS Institute, based in the USA, is the worlds largest private software company. SAS is a developer of analytics...