Alpha Company publishes & sells a calendar for $6.50 each. The variable cost per

Question

Alpha Company publishes & sells a calendar for $6.50 each. The variable cost per calendar is $4.00 with the current annual sales volume of 200,000 calendars. This volume is currently Alpha's breaking even point. Use this information to determine the dollar amount of Alpha's fixed costs. (Round any total dollar value to the nearest whole dollar & enter as whole dollars only. Round any unit dollar value to the nearest penny & enter with both dollar(s) & cents. Round any unit non-dollar decimal numbers to the next higher whole number and enter as a whole number.)

Explanation / Answer

contribution margin = 6.50 -4.00 2.5 BEP(units)   = fixed cost/contribution margin per unit 200,000*2.5 = fixed cost fixed cost = 500000 answer

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