Question

Evaluating strategies LO C2 If the company raises its selling price to $240 per unit. 1. Compute Hudson Co.'s contribution margin per unit. 2. Compute Hudson Co.'s contribution margin ratio. 3. Compute Hudson Co.'s break-even point in units. 4. Compute Hudson Co.'s break-even point in sales dollars.

Answer 1

Instructions are below.

Step-by-step explanation:

We weren't provided with enough information to answer the requirements. But, I will provide the formulas.

1) Contribution margin:

CM= selling price - unitary variable cost

2) contribution margin ratio:

contribution margin ratio= contribution margin / selling price

3) break-even point in units

Break-even point in units= fixed costs/ contribution margin per unit

4) break-even point in sales dollars:

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