EEB (Click the icon to view the budget Requirements 1. Fill in the blanks for ea

Question

EEB (Click the icon to view the budget Requirements 1. Fill in the blanks for each company 2. Compute breakeven, in sales dolars, for each company. Which company has the lowest breakeven point in sales dollars? What causes the low breakeven point? Requirement 1. Fill in the blanks for each company. (Round the contribution margin per unit and ratio calculations to two decimal places.) Target sales $ 720,000$ 400,000 $ 224,000 Variable expenses 216,000 156,000 93,000 $ 154,000 $ 131,000 Units sold. 125,000 12.500 16,000 s8.96 s 39.00 Contribution margin per unit 6.00 0.65 Requirement 2 Begin by determining the formula, then compute the break even sales for each company one at a time. (Complete all answer boxes. For amounts with a $0 balance, make sure to enter "0" in the appropriate cell.) )I l y/ D )1 as h lowes beakewen poin,primanly due to Choose from any list or enter any number in the input fields and then continue to the next

Explanation / Answer

Answer 1. Company Q R S T Target Sales                          720,000.00                         400,000.00                         224,000.00                            780,000.00 ($156,000 + $624,000) Variable Expense                          216,000.00                         140,000.00                         112,000.00                            156,000.00 ($400,000 X 0.35) ($224,000 - $112,000) Contribution Margin                          504,000.00                         260,000.00                         112,000.00                            624,000.00 ($720,000 - $216,000) ($400,000 X 0.65) (12,500 X $8.96) (16,000 X $39) Fixed Expense                          350,000.00                         156,000.00                            93,000.00                            493,000.00 ($504,000 - $154,000) ($624,000 - $131,000) Operating Income (Loss)                          154,000.00                         104,000.00                            19,000.00                            131,000.00 ($260,000 - $104,000) ($112,000 - $19,000) Unit Sold                            84,000.00                         125,000.00                            12,500.00                              16,000.00 ($504,000 / $6) Contribution Margin Per Unit                                       6.00                                      2.08                                      8.96                                      39.00 ($260,000 / 125,000) Contribution Margin Ratio                                       0.70                                      0.65                                      0.50                                         0.80 ($504,000 / $720,000) ($112,000 / $224,000) ($624,000 / $780,000) Answer 2. ( Fixed Expenses + Target Profit ) / Contribution Margin Ratio = BEP (In $) Q (           350,000.00 + 0 ) /                                              0.70 =       500,000.00 R (           156,000.00 + 0 ) /                                              0.65 =       240,000.00 S (             93,000.00 + 0 ) /                                              0.50 =       186,000.00 T (           493,000.00 + 0 ) /                                              0.80 =       616,250.00 Company S is the Lowest Break Even Point, primarily due to Lower Fixed Cost.

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