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APPLY THE CONCEPTS: Calculate the break-even point in sales dollars for Martin Computing ...

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Accounting

APPLY THE CONCEPTS: Calculate the break-even point in sales dollars for Martin Computing
Contribution Margin per Unit ,= :
x,x=$,x
Contribution Margin Ratio =$$|x=|,x%
Break-Even Point in Sales Dollars =$,%=$
Units Sold at Break-Even Point =,|x units
Assume that the number of units that Martin sold exceeded the break-even point by one (1).
How much would operating income be?
$
What would operating income be if the units sold exceeded the break-even point by five (5) units?
$
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Use the data along with the formulas introduced in the previous section to compute Contribution Margin per Unit and Contribution Margin Ratio.
The change in Contribution Margin with sales volume will then be equal to the Contribution Margin per Unit times the unit change.
The Cost-Volume-Profit Graph
Therefore, the slope of the total costs line is equal to the unit variable cost . The break-even point exists at the point where the two lines intersect .
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