Professional Documents
Culture Documents
Business Acc Exam - Question 3
Business Acc Exam - Question 3
a) Break even per unit = Total Fixed Cost / Contribution Margin Unit
= 216,000/18
= 12,000
Break even in dollar = Sales Price Per Unit x Break Even Point in Units
= 30 x 12,000
= 360,000
b) The total contribution margin is 216,000 because the contribution margin is equal to fixed expenses
at the break even point.
c) Unit sold to attain target profit = Target profit+Fixed expenses/Unit contribution margin
= 90,000+216,000/18 = 17,000 units
= 60%
Expected total contribution margin: ($500,000 x 60%) $300,000
Present total contribution margin : ($450,000 × 60%) $270,000
Increased contribution margin : $30,000