Blanchard Company manufactures a single product that sells for $180 per unit and

Question

Blanchard Company manufactures a single product that sells for $180 per unit and whose total variable costs are $135 per unit. The company's annual fixed costs are $562,500 ) Compute the company's contribution margin per unit Contribution margin (b) Compute the company's contribution margin ratio Choose Numerator: Choose Denominator: Contribution margin r Contribution margin ratio (c) Compute the company's break -even point in units Choose Numerator Choose Denominator Break-even units Break-even units (d) Compute the company's break even point in dollars of sales Choose Numerator: Choose Denominator: Break even dollars Break-even dollars Check my work

Explanation / Answer

Sales 180 Less:Variable costs 135 Contribution margin $45 Contribution margin/ Sales =Contribution margin ratio 45/ 180 =25% Fixed costs/ Contribution margin =Breakeven units 562500/ 45 =12500 units Fixed costs/ Contribution margin ratio =Breakeven dollars 562500/ 0.25 =$2,250,000.

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