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  3. apply the concepts: break-even point in units assu

APPLY THE CONCEPTS: Break-even point in units Assume that you are part of the accounting...

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APPLY THE CONCEPTS: Break-even point in units Assume that you are part of the accounting team for Kolbe Computing. The company currently expects to sell 700 units for total revenue of s17,500 each month. Kolbe Computing estimates direct materials costs of $3,150, direct labor costs of $4,200, variable overhead costs of S2 100, and variable selling and administrative costs of $1,050 The company also expects fixed costs of $3,000, which includes fixed overhead and selling and administrative costs. Using this information, complete the contribution margin income statement shown below Kolbe Computing Contribution Margin Income Statement Sales Less: Variable costs Contribution margin Less: Fixed costs Operating income The break-even point can be expressed in terms of sales dollars or number of units, The break-even units tells us how many units must be sold so that operating income is $o Kolbe Computing is examining cost behavior patterns. Your recommendation is to first determine the break-even point in units. Calculate the contribution margin (CM) per unit. Next, complete the formula to the right to determine the break-even units. units

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