XYZ Company produces and sells three products, A, B, and C. The sales and cost information for
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Question:
XYZ Company produces and sells three products, A, B, and C. The sales and cost information for each product is given below:
| Product | Selling Price per Unit | Variable Cost per Unit |
|---|---|---|
| A | $50 | $25 |
| B | $60 | $30 |
| C | $70 | $35 |
During the year ended December 31, 2022, the company sold 5,000 units of product A, 4,000 units of product B, and 3,000 units of product C. In addition, the company incurred $75,000 of fixed costs.
Required:
- Calculate the contribution margin per unit and contribution margin ratio for each product.
- Determine the break-even point in units and in sales dollars for the company as a whole.
- Determine the sales revenue required to earn a profit of $100,000.
- Calculate the company's margin of safety in dollars.
Expert Answer:
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