Question

Protest Industries produces only one product. The following revenues and cost have been estimated for the...

  1. Protest Industries produces only one product. The following revenues and cost have been estimated for the forthcoming month:
  • Selling price, $ 217 per unit (SP)
  • Variable cost, $ 178 per unit (VC)
  • Fixed Cost, $ 79,000

The managers of the firm wish to know the following:

  1. Calculate contribution margin per unit
  2. Calculate contribution margin ratio.
  3. BEP in units
  4. Calculate BEP in sales.

Please answer all the questions clearly and accurately with high charting the tables on the subject

I want the answer to be written on the computer and not handwritten, please

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Answer #1

Contribution margin per unit  

Selling Price $217
(-) Variable cost $178
Contribution margin per unit $39

Contribution margin ratio = Contribution margin per unit / Selling price per unit

= $39 / $217

= $18.00

Break even point = Fixed cost / contribution margin per unit

= $79,000 / $39

= 2,026 units

Break even points in dollar sales = Break even point in units * selling price

= 2,026 units * $217

= $439,642

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