Question

Carla Vista Bucket Co., a manufacturer of rain barrels, had the following data for 2019.

Sales		2,330	units
Sales price		$70	per unit
Variable costs		$42	per unit
Fixed costs		$32,620

(a)

Correct answer iconYour answer is correct.

What is the contribution margin ratio?

Contribution margin ratio

%

(b)

Correct answer iconYour answer is correct.

What is the break-even point in dollars?

Break-even point

$

(c)

What is the margin of safety in dollars and as a ratio?

Margin of safety		$
Margin of safety ratio			%

(d)

If the company wishes to increase its total dollar contribution margin by 30% in 2020, by how much will it need to increase its sales if selling price per unit, variable price per unit and total fixed costs remain constant?

Total increase in sales required:

$

Answer 1

Answer.

a) contribution margin Ratio=40%

b) Break even point in dollars=$81550

c) Margin of safety =$81550, Margin of safety ratio=50%

d) Total increase in sales=$19572

Part d)