Question

Roland had revenues of $601,000 in March. Fixed costs in March were $212,520 and profit was $51,920. A. What was the contribution margin percentage?B. What monthly sales volume (in dollars) would be needed to break-even?

c. What sales volume (in dollars) would be needed to earn $169,420?

Answer 1

Answer: See explanation

Step-by-step explanation:

Revenue = $601,000

Fixed costs = $212,520

Profit = $51,920

A. A. What was the contribution margin percentage?

Contribution margin will be calculated as:

= (Fixed cost + Profit) / Revenue

= ($212520 +$51920) / $601,000

= $264440 / $601000

= 44%.

B. What monthly sales volume (in dollars) would be needed to break-even?

The break even point sales will be:

= Fixed cost / Contribution margin

= $212520 / 44%

= $212520 / 0.44

= $483000

C. What sales volume (in dollars) would be needed to earn $169,420?

This will be:

= (FC+DP) / Contribution margin

= (212520 + 169420)/0.44

= $381940/0.44

= $868045.45