Required information Use the following information for the Exercises below. (The

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Required information Use the following information for the Exercises below. (The following information applies to the questions displayed below] Hudson Co. reports the contribution margin income statement for 2017 HUDSON co. Contribution Margin Income Statement For Ye Sales (9,900 units at $225 each) Variable costs (9,900 units at $180 each) Contribution margin Fixed costs Pretax income $2,227,500 1,782,000 $445,500 342,000 $ 103,500 Exercise 18-16 Break-even LO P2 1. Compute Hudson Co.'s break-even point in units and 2. Compute Hudson Co.'s break-even point in sales dollars 1 Break-even point 2 Break-even point units K Prev

Explanation / Answer

Req 1: Contribution margin 445500 Divide: Number of units 9900 Contribution margin per unit 45 Fixed cost 342000 Break even units: Total fixed cost / CM per unit 342000 /45 = 7600 units Req 2: CM ratio: Contribution margin/ Total sales*100 445500 /2227500 *100 = 20% Break even in $: Total fixed cost / CM ratio 342000 /20% = $ 1710,000

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