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    Contribution margin ratio & BEP

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    The income statement for Ellwell for 2000 is as follows:

    Sales (10,000 units) $80,000
    Less variable costs -$56,000
    Contribution margin $24,000
    Less fixed costs -$24,000
    Net income $ 0

    What is the contribution margin ratio?

    The contribution margin at the break-even point:

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    Solution Summary

    Solution shows calculations of contribution margin ratio and the break-even point