The budgets of four companies yield the following information: (Click the icon t

Question

The budgets of four companies yield the following information: (Click the icon to view the budget information for the four companies.) Requirements 1. Fill in the blanks for each company. 2. Compute break-even, in sales dollars, for each company. Which company has the lowest break-even point in sales dollars? What causes the low break-even point? Requirement 1. Fill in the blanks for each company, (Round the contribution margin per unit and ratio calculations to two decimal places.) 720,000 S400,000 $190,000 Target sales .. Variable expenses .. Fixed expenses . . . ' . . . Operating income (loss)... 216,000 270,000 156,00090,000 $154,000 140.000 15,750 9.50 $ 40.00 125,000 12,000 Contribution margin per unit..$ Contribution margin ratio 6.00 0.65 Requirement 2. Compute break-even, in sales dollars, for each company Which company has the lowest break-even point in sales dollars? What causes the low break-even point? I has the lowest break-even point, primarily due to Enter any number in the edit fields and then continue to the next question Save for Later

Explanation / Answer

1).

2). Break even point in sales Dollars = Fixed Cost / Contribution Margin Ratio

Q = $350000 / 0.70

= $500000

R = $156000/ 0.65

= $240000

S = $90000 / 0.60

= $150000

T = $490000 / 0.70

= $700000

S company has the lowest break even point in sales dollars.

S company has lowest break even point because his Sales are lowest Compare to other companys.

Particulars Q R S T Target Sales $720000 $400000 $190000 $900000 Variable Expenses $216000 $140000 $76000 $270000 Fixed Expenses $350000 $156000 $90000 $490000 Operating Income/(Loss) $154000 $104000 $24000 $140000 Units Sold 84000 125000 12000 15750 Contribution margin per unit $6 $2.08 $9.5 $40 Contribution Margin Ratio 0.70 0.65 0.60 0.70

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