Exercise 3-1 ed. Lasley Cash, Ltd. se s the hats for $25 each Lasley Cash, Ltd.

Question

Exercise 3-1 ed. Lasley Cash, Ltd. se s the hats for $25 each Lasley Cash, Ltd. operates a chain o e dus ve sk hat boutiques in the estem United States. The stores purchase several hat styles om a single distributor at S12 each. All other costs named by the company are If fixed costs total $130,000 per year, what is the breakeven point in units? In sales dollars? (Use your answer of breakeven units to calculote the breakeven point in dollars.) The hreakeven point The breakeven sales hats what is Lasley Cash's contribution margin ratio? Its variable cust ratio? (Round ratios to 2 percentae places e.g. 0.38 = 38%.) Contribution margin rato Variable cost ratio Click if you would like to Show Work tor this question: Open Show Work

Explanation / Answer

Contribution margin=Sales-Variable cost

=(25-12)=$13

Contribution margin ratio=Contribution margin/Sales

=(13/25)=52%

Variable cost ratio=Variable cost/Sales

=(12/25)=48%

Breakeven point=Fixed cost/Contribution margin

=(130,000/13000)=10000 hats

=(10000*25)=$250,000.

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