1. South Company sells a single product for $20 per unit. If variable expenses are 60% of sales and fixed expenses total $9,600, the break-even point will be:
2. Arthur Company has a margin of safety percentage of 25%. The break-even point is $300,000 and the variable expenses are 45% of sales. Given this information, the net operating income is:
1. The contribution margin is 1-60%=40%. The contribution margin per unit is 20X40%=$8.
Breakeven units = Fixed Cost/Contribution margin per unit = 9,600/8=1,200
Breakeven Sales ...
The solution explains the calculation of break-even point and net operating income