Question

During FY 2016, Bravo Company sold 16,000 units for $84,000. Bravo had $2.75 variable costs per unit sold. Bravo also reported $28,000 of fixed costs. Use this information to determine FY 2016: 1. Contribution Margin per unit 2. Breakeven in Units 3. Breakeven in Total Sales (Round any total dollar value to the nearest whole dollar & enter as whole dollars only. Round any unit dollar value to the nearest penny & enter with both dollar(s) & cents. Round any unit non-dollar decimal numbers to the next higher whole number and enter as a whole number.)

Answer 1

1.- CM 13.25

2.- BEP units 2114 (round to the next higher whole number)

3.- BEP dollars $33,811.32 (nearest cent)

Step-by-step explanation:

`Sales \: Revenue - Variable \: Cost = Contribution \: Margin`

16 - 2.75 = 13.25

`(Fixed\:Cost)/(Contribution \:Margin) = Break\: Even\: Point_(units)`

28,000/13.25 = 2113.2075

`(Fixed\:Cost)/(Contribution \:Margin \:Ratio) = Break\: Even\: Point_(dollars)`

`(Contribution Margin)/(Sales Revenue) = $Contribution Margin Ratio`

13.25/16 = 0.828125

28,000/0.828125 = 33811.32