If Fixed Costs are $20,000 and Variable Cost per unit is $1.50 and we sell...
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Accounting
If Fixed Costs are $20,000 and Variable Cost per unit is $1.50 and we sell our product for $5.00 per unit, Calculate the following (show your work!): 1. Contribution Margin per Unit (CMPU) = Selling price per unit - Variable cost per unit = $5 - $ 1.5 = $ 3.5 per unit 2. Contribution Margin Ration (CMR) = (Total revenue - Variable cost)/ Total revenue = ( 5 - 1.50) / 5 = 3.5 / 5 * 100 = 70% 3. Break Even in Units (BEP) 4. Break Even in Sales (BES) 5. How many units do we need to sell if we want Net Income to be $25,000
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