A single product is made by Origins, Inc. The company\'s November 2018 income st

Question

A single product is made by Origins, Inc. The company's November 2018 income statement is below.

Sales                                       $60,000
Less variable expenses          (25,000)
Contribution margin                35,000
Less fixed expenses               (10,500)
Net income                            $ 24,500

Required:

a.   Contribution margin percent is                                                  ________ %
b.   Breakeven point in total sales dollars is                                    $ ________

Explanation / Answer

a. contribution margin percent contribution / sales 35,000/60,000 58.33% b. BEP(dollars)   = fixed cost/contribution margin ratio                          = 10,500/58.33% 18000

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