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    Break even volume as a percentage of capacity

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    The Rolling Creek Textile Mill produces denim. The fixed monthly cost is $21,000, and the variable cost per yard of denim is $0.45. The mill sells a yard of denim for $1.30. If the maximum operating capacity of the Rolling Creek Textile Mill described in problem 3 is 25,000 yards of denim per month, determine the break even volume as a percentage of capacity.

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    Solution Preview

    Contribution per yard = Price- variable cost
    = 1.30- 0.45 =0.85
    Fixed ...

    Solution Summary

    The solution shows calculations of break even volume as a percentage of capacity.