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Find Break even analysis and target volume Fixed...

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Solution


Question

Find Break even analysis and target volume Fixed expenses are $85,000.00 and variable expenses are $1.20 per unit. Selling price is 2.00 per unit. Questions. 1) Compute the contriubtin margin per unit and contribution margin ratio (I figured it out) Contriubtion Margin per unit .80/ sales per unit 2.00= 40% Contribution Margin Ratio 2) Find break even point in units and dollars. Instructor provided formulas below but I could not figure out operating income to calculate break even for units or dollars. Breakeven Sales in Units = Fixed Expenses + Operating Income divided by Contribution Margin per unit Breakeven Sales in Dollars = Fixed Expnses + Operating Income divided by Contribution Margin RATIO Please help with calculating and explaining Question 2.

 

Paper#8050 | Written in 18-Jul-2015

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