Question: Suppose that the price is $40, unit variable cost is $32/unit, and total fixed costs are $3,600. Required: a) Compute the unit contribution margin and

Suppose that the price is $40, unit variable cost is $32/unit, and total fixed costs are $3,600. Required: a) Compute the unit contribution margin and contribution margin ratio: unit CM= CM ratio= (enter CMR as a fraction of 1, not as %) b) Write down the CVP relation using CMR: profit as a function of sales revenue. (fill in the missing numbers in an equation like Profit = 0.35 * Revenue - 50). Profit = * Revenue - c) Based on the CVP relation in (b), what is the breakeven revenue (if necessary, round up to the nearest integer)? d) Based on the CVP relation in (b), what is the sales revenue required to achieve target profit of $5,000?

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!