Answered

IDNLearn.com makes it easy to find accurate answers to your questions. Discover the information you need from our experienced professionals who provide accurate and reliable answers to all your questions.

Assume the following information: Selling price per unit $200 Contribution margin ratio 50% Total fixed costs $275,000 How many units must be sold to generate a profit of $50,000

Sagot :

Facundobuzzettiidn

Answer:

Results are below.

Explanation:

Giving the following information:

Selling price per unit $200

Contribution margin ratio 50%

Total fixed costs $275,000

Desired profit= $50,000

First, we need to calculate the sales required to obtain the desired profit:

Break-even point (dollars)= (fixed costs + desired profit) / contribution margin ratio

Break-even point (dollars)= (275,000 + 50,000) / 0.5

Break-even point (dollars)= $650,000

Now, the number of units:

Number of units= 650,000 / 200= 3,250

Or, you can use the following formula:

Break-even point in units= (fixed costs + desired profit) / contribution margin per unit

Break-even point in units= (275,000 + 50,000) / (0.5*200)

Break-even point in units= 3,250

We greatly appreciate every question and answer you provide. Keep engaging and finding the best solutions. This community is the perfect place to learn and grow together. Thank you for visiting IDNLearn.com. We’re here to provide clear and concise answers, so visit us again soon.