Question

# Required information [The following information applies to the questions displayed below.] Hudson Co. reports the contribution...

Required information

[The following information applies to the questions displayed below.]

Hudson Co. reports the contribution margin income statement for 2019.

 HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (10,600 units at \$300 each) \$ 3,180,000 Variable costs (10,600 units at \$240 each) 2,544,000 Contribution margin 636,000 Fixed costs 480,000 Pretax income \$ 156,000

1. Compute Hudson Co.'s break-even point in units.
2. Compute Hudson Co.'s break-even point in sales dollars.

1. | Break-even point |...................| units
2. Break-even point |.....................| units

Break-even point in units is computed as:

1.Break-even point(in units)=Fixed costs/Contribution margin per unit

Contribution margin per unit=Selling price per unit-Variabl cost per unit

Contribution margin per unit=\$300-\$240

Contribution margin per unit=\$60
Break-even point(in units)=480,000/60

Break-even point(in units)=8,000 units

2.Break-even sales(in dollars)=Break-even point in units*Selling price per unit

Break-even sales(in dollars)=8,000*300

Break-even sales(in dollars)=\$2,400,000

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