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Question 8 5 pts A company sells a product for $1,250 each, variable cost per unit is $750, and total fixed cost are $700,000
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Answer #1

1. Contribution margin = 500

Contribution Margin = Selling Price - Variable Cost = 1250 - 750 = 500

2. Break even in units = 1400

= Fixed Expense / Contribution Margin per unit = 700000 / 500 = 1400

3.

Sales in units = 2100

Sales in dollers = 2100 x 1250 = 2625000

4.

Then Contribution Margin will be 750 (1250 - 500)

Fixed Expense is 925000

The break even unit = 925000 / 750 = 1233.3 units

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