Blanchard Company manufactures a single product that sells for $190 per unit and

Question

Blanchard Company manufactures a single product that sells for $190 per unit and whose total variable costs are $133 per unit The company's annual fixed costs are $735,300. (al) Compute the company's contribution r unit Contribution margin (b) Compute the company's contribution margin ratio. C hoose Choose Numerator: Contribution Margín Contribution margin ratio (c) Compute the company's break even point in units Choose Numerator Choose De Break-Even Units Break-even units (d) Compute the company's break even polint in dadars ot sles Break-Even Dollars Choose Numerator Break-even dollars

Explanation / Answer

SOLUTION

(A) Contribution margin per unit = Sales price - Variable Costs

= $190 - $133 = $57

(B) Contribution margin ratio = Contribution margin per unit / Sales price * 100

= $57 / $190 * 100 = 30%

(C) Breakeven point in units = Fixed Expense / Contribution margin per unit

= $735,300 / $57 = 12,900 units

(D) Breakeven point in dollar = Fixed Expense / Contribution margin ratio

= $735,300 / 30% = $2,451,000

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