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Zachary Company reported the following data regarding the product it sells: ...

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Question

Accounting

Zachary Company reported the following data regarding the product it sells:

Sales price $ 48
Contribution margin ratio 25 %
Fixed costs $ 336,000

Required

Use the contribution margin ratio approach and consider each requirement separately.

  1. What is the break-even point in dollars? In units?

  2. To obtain a profit of $48,000, what must the sales be in dollars? In units?

  3. If the sales price increases to $60 and variable costs do not change, what is the new break-even point in dollars? In units?

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a. Break-even point in dollars Break-even point in units b. Sales in dollars Sales in units c. Break-even point in dollars Break-even point in units

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