Question

The budgets of four companies yield the following​ information:

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​(Click the icon to view the budget information for the four​ companies.)

Requirements

1.	Fill in the blanks for each company.
2.	Compute​ breakeven, in sales​ dollars, for each company. Which company has the lowest breakeven point in sales​ dollars? What causes the low breakeven​ point?

Requirement 1. Fill in the blanks for each company. ​(Round the contribution margin per unit and ratio calculations to two decimal​ places.)

		Q
	Target sales. . . . . . . . . . . . . . . . . .	$680,000
	Variable expenses. . . . . . . . . . . . .	170,000
	Fixed expenses. . . . . . . . . . . . . . .
	Operating income (loss). . . . . . . .	$150,000
	Units sold. . . . . . . . . . . . . . . . . . . .
	Contribution margin per unit. . . .	$6.25
	Contribution margin ratio. . . . . . .

Company

Q

R

S

T

Target sales. . . . . . . . . . . . . . . .

$680,000

$445,000

$224,000

$

Variable expenses. . . . . . . . . .

170,000

270,000

Fixed expenses. . . . . . . . . . . . .

159,000

93,000

Operating income (loss). . . . . .

$150,000

$

$

$133,000

Units sold. . . . . . . . . . . . . . . . .

106,800

12,500

18,000

Contribution margin per unit. .

$6.25

$

$8.96

$35.00

Contribution margin ratio. . . . .

0.60

Answer 1

	Q	R	S	T
Sale Price	$680,000	$445,000	$224,000	$900,000
Variable cost	$170,000	$178,000	$112,000	$270,000
Contribution	$510,000	$267,000	$112,000	$630,000
Less:Fixed Cost	$360,000	$159,000	$93,000	$517,000
Net Income	$150,000	$108,000	$19,000	$133,000
Units sold	81,600	106,800	12,500	18,000
Contribution margin per unit	$6.25	$2.50	$8.96	$35.00
Contribution margin ratio	75.00%	60.00%	50.00%	70.00%