Question

berlino corporation sells coffee makers for $33 each and has fixed costs of $10,200 and variable costs of $16 per unit

a. compute the contribution margin per unit $_____

b. compute the breakeven quantity___ (no commas, only enter amount)

c. compute the breakeven sales amount ____ (no commas, only enter amount)

Answer 1

As we know that:

Contribution per unit= Selling price per unit - variable cost per unit,

Break-even quantity = Fixed Cost/ Contribution margin per unit &

Break-even sales amount = Break-Even quanitity* selling price per unit. Therfore,

a. Computation of contribution margin per unit:

Particulars		$
Selling Price	A	33
Less: Variable cost per unit	B	16
Contribution Margin	C=A-B	17

b. Computation of breakeven quantity in units:

Particulars		$
Fixed Costs	A	10200
Contribution Margin	B	17
Break even quantity(units)	C=A/B	600

c. Computation of breakeven sales amount:

Particulars		$
Break even quantity	A	600
Selling Price per unit	B	33
Break even sales amount	C=A*B	19800

THEREFORE,

a. compute the contribution margin per unit $ 17

b. compute the breakeven quantity 600

c. compute the breakeven sales amount 19800