Norman Company sells MP3 players for $60 each. costs are $40 per unit. and costs

Question

Norman Company sells MP3 players for $60 each. costs are $40 per unit. and costs $60,000 What sales are needed by Norman to break even? Fleming Company sells a product ter $50 per unit The fined costs are $S2S,000 and the variable costs are 60S of the felling price As a result of new automated equipment. it is anticipated that fixed costs will Increase by $125,000 and variable costs will be 50% of the price. The new break-even point In units is Hess, Inc. sells a product with a contribution margin of $12 per unit, freed costs of $66,000, and sales tor the current year of $100,000. How much is Hess's break-even point?

Explanation / Answer

21.

New Contribution =50 % of Selling Price =50 x 50%=$25

   New fixed Cost=$525,000+$125,000=$650,000

New Break even point in unit = New Fixed Cost/New Contribution per unit

                                               =$650,000/25=26,000

22.

Break even point in unit = Fixed Cost/Contribution per unit

                                         = $66,000/12

                                          =5,500 Units

23.

Contribution Margin Ration= Sales- Variable cost/Sales x 100

                                            =100%-20%=80%

Break Even Point $=Fixed Cost/Contribution Margin Ratio

                            =12,000/80%

                              =$15,000

24.

Let ‘s ‘ the sales price

In break even point contribution is equal to fixed cost

Contribution=Sales –variable cost

2500 x s-$55,000=$34,000

2500s=$55,000+$34,000

2500s=$89,000

S=$89,000/2,500=$35.6

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