Question

g Hudson Co. If the company raises its selling price to $300 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:

Giving the following information:

We weren't provided with enough information to solve the requirements. But, I will provide an example and formulas to guide an answer.

Example:

Selling price= $300

Unitary variable cost= $170

Fixed costs= 125,000

First, we need to calculate the contribution margin and contribution margin ratio:

Contribution margin= selling price - unitary variable cost

Contribution margin= 300 - 170= 130

Contribution margin ratio= contribution margin/selling price

Contribution margin ratio= 130/300= 0.43

Now, we can determine the break-even point in units and dollars:

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

Break-even point in units= 125,000/130

Break-even point in units= 962

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

Break-even point (dollars)= 125,000/0.43

Break-even point (dollars)= $290,698