Ariba Corporation reaches its breakeven point at $3,200,000 of revenues. At present, it is selling 105,000 units and its variable costs are $30. Fixed manufacturing costs $800,000.
1. Compute the contribution margin percentage.
2. Compute the selling price.
3. Compute the margin of safety in units and dollars.
1) contribution margin = 25%
2) selling price per unit = $40
3) margin of safety
in units = 25000 units
In dollars = $1000,000
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