Question

Exercise 3-2A Per-unit contribution margin approach LO 3-1 Solomon Corporation sells products for $38 each that have variable costs of $20 per unit. Solomon's annual fixed cost is $430,200. Required Use the per-unit contribution margin approach to determine the break-even point in units and dollars. Break-even point in units Break-even point in dollars

Answer 1

Selling price per unit = $38

Variable cost per unit = $20

Fixed cost = $430,200

Contribution margin per unit = Selling price per unit - Variable cost per unit

= 38 - 20

= $18

Break even point in units = Fixed cost/Contribution margin per unit

= 430,200/18

= 23,900

Break even point sales dollar = Break even point in units x Selling price per unit

= 23,900 x 38

= $908,200

Break even point in units	23,900
Break even point in dollar	$908,200

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