Please find me the correct answer for -Break-Even sale Exercise 5-16 Glacial Com

Question

Please find me the correct answer for -Break-Even sale
Exercise 5-16 Glacial Company estimates that variable costs will be 67.8% of sales, and fixed costs will total $705,000. The selling price of the product is $4.20. Your answer is partially correct. Try again. Compute the break-even point in (1) units and (2) dollars. (Round intermediate calculation to 3 decimal places, eg. 0.527 (52.7%) and final answers to 0 decimal places, e.g. 5,275.) (1) Break-even sales (2) units Break-even sales 2189,441 LINK TO TEXT VIDEOI STMILAR EXERCISE ?Your answer is correct. Assuming actual sales are $2,589,000, compute the margin of safety in (1) dollars and (2) as a ratio. (Round ratio to O decimal places, e.g. 20.) (1) Margin of safety 399,559 (2) Margin of safety ratio 151 %

Explanation / Answer

Solution:

Selling price per unit = $4.20

Variable cost per unit = $4.20 * 67.8% = $2.8476

Contribution margin per unit = $4.20 - $2.8476 = $1.352 (rounded off to 3 decimal places)

Contribution margin ratio = 32.2%

Fixed cost = $705,000

Breakeven sales (Units) = Fixed costs / contribution margin per unit = $705,000 / $1.352 = 521450 units

Breakeven sales (Dollar) = Fixed costs / contributio margin ratio = $705,000 / 32.2% =$2,189,441

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