If total fixed costs are $110,250 and the contribution margin ratio is 35%, how
ID: 2490821 • Letter: I
Question
If total fixed costs are $110,250 and the contribution margin ratio is 35%, how much in sales is needed to reach the break-even point? 315,000 units $315,000 $385,875 $38,500 If total fixed costs are $220,000 and the contribution margin per unit is $20, what is the break-even point in sales? $11,000 12,000 units 11,000 units It can't be computed If fixed costs are $66,000 and variable costs are 70% of the selling price, what is the breakeven point in sales? $220,000 $94,286 (rounded) $19,800 $230,000 If a company has a unit sales price of $18, unit variable costs of $12, fixed costs of $18,000 and wants to earn a profit of $24,000, how many units must it sell? 6,000 4,000 7,000 12,000 Which of the following is NOT true at the break-even point? Sales = fixed costs + variable costs Variable costs = Sales - fixed costs Total contribution margin = total fixed costs Variable costs - contribution margin = net profitExplanation / Answer
Answer to Question 18 is Option b
Break Even Point (in sales) = Fixed Expenses / Contribution Margin
Break Even Point (in sales) = 110,250 / 35%
Break Even Point (in sales ) = $ 315,000
Answer to Question 19 is Option C
Break Even Point = Fixed Cost (in $) / Contribution Margin( in $)
Break Even Point = 220,000 / 20
Break even Point = 11,000 units
Answer to Question 20 is Option A
At Break even point, Sales= Variable Cost + Fixed Cost
Let the Sales be x
X = 0.70 x +66000
0.30 x = 66000
X = $ 220,000
Answer to Question 21 is Option C
Let the units sold be x , then
18 x = 12 x + 18000 + 24000
6 x = 42000
X = 7000
Therefore, the number of the units required to earn an profit of $ 24000 is 7,000 units
Answer to Question 22 is Option d
Break even Point is a point of sale where is the sum otal of Fixed cost and variable cost is equal to Sales.
Therefore, Sales= Fixed Cost + Variable cost or Total Contribution Margin(Sales- Variable Cost) = Total Fixed cost