Explore BrainMass

Explore BrainMass

    Variable expense/Break-Even/Net Income

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    The following data pertain to Epsom Corporation's operations:

    Sales 12,000 units
    Selling price $25 per unit
    Contribution Margin Ratio 40%
    Margin of Safety percentage 30%

    1. What is the variable expense per unit?
    2. What is the break-even level in sales dollars?
    3. What is the net operating income at sales of 12,000 units?

    © BrainMass Inc. brainmass.com June 3, 2020, 8:20 pm ad1c9bdddf
    https://brainmass.com/business/accounting/variable-expense-break-even-net-income-133319

    Solution Preview

    1. The contribution margin ratio = 40%. This implies that the variable cost is 60%. The selling price per unit is $25. The variable cost per unit is 60%X25=$15.

    2. Margin of ...

    Solution Summary

    The solution explains the calculation of variable expenses, break-even and net income.

    $2.19

    ADVERTISEMENT