Variable costs for Sheridan Company are 20% of sales. Its selling price is $125 per unit....
Variable costs for Sheridan Company are 20% of sales. Its selling price is $125 per unit. If Sheridan sells one unit more than break-even units, how much will profit increase?
$100
$625
$25
$50
Please try to explain how to do the calculations for the answers! thanksssss
Homework Answers
Answer: $100
Variable cost Per Unit = 125 *20% = 25
Contribution MArgin = 125-25 =$100
At the Break-Even Point
total Cost = Total Revenue
After Break-even Point the Profit of the Firm Will increase by Contribution Margin Per Unit for Each Unit of sale.
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