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    Contribution margin and Break even point

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    Perrson Company makes two types of backpacks. Data for the company's activity during a typical month are presented below:

    School Hiker
    Model Model
    Sales units 40,000 40,000
    Selling price per unit $6 $18
    Variable expense per unit $2 $10

    The company's total fixed expenses are $80,000. There are no beginning or ending inventories.

    Required:

    a. What is the per unit contribution margin for each of the two models?

    b. What is the break-even point in terms of sales dollars if the sales mix remains constant?

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    https://brainmass.com/business/accounting/contribution-margin-and-break-even-point-220102

    Solution Preview

    Perrson Company makes two types of backpacks. Data for the company's activity during a typical month are presented below:
    Required:

    a. What is the per unit contribution margin for each of ...

    Solution Summary

    This solution provides all of the steps to compute the contribution margin and break even point

    $2.19

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