Question

Price, Variable Cost per Unit, Contribution Margin, Contribution Margin Ratio, Fixed Expense For each of the following independent situations, calculate the amount(s) required. Required: 1. At the break-even point, Jefferson Company sells 115,000 units and has fixed cost of $349,600. The variable cost per unit is $4.56. What price does Jefferson charge per unit?

Answer 1

$ 7.6

Step-by-step explanation:

Break-even point refers to when total sales is equal to total expenses.

Net income made at break even point is zero meaning sales = fixed cost + variable cost

fixed cost per units = $349,600 / 115,000 units = $ 3.04

variable cost per unit = $ 4.56

Jefferson charged per unit = $ 3.04 + $ 4.56 = $ 7.6 per unit