Cranberry Wood Products Inc. spends an average of $9.30 in labor and $12.60 in materials on every unit it sells. Sales commissions and shipping amount to another $3.10. All other costs are fixed and add up to $149,000 per month. The average unit sells for $32.00.
a. Contribution per unit = Sales Price - Variable Price =
|Sales Commission &|
|Contribution per Unit||7.0|
b. Breakeven Point in Units = Fixed Costs / Contribution per unit = 149000 / 7 = 21285.7 = 21286 Units
c. Dollar Breakeven point = 21286 * 32 = 681,152 $
d. Break even Graph
|Units Sold||Contribution||Fixed Costs||Profit / (Loss)|
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