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Contribution Margin and Contribution Margin Per Unit Assignment

Author:
February 18th, 2020

Jefferson Company reported $4,000,000 of sales during the month and incurred variable expenses totaling $2,800,000 and fixed expenses totaling $720,000. A total of 80,000 units were produced and sold last month. The company has no beginning or ending inventories,

a. What is the company’s total contribution margin and contribution margin per unit?

b. How many units would the company have to sell to achieve a desired target profit of $600,000?

c. What is the company’s break-even point in sales dollars?

d. If variable expenses are expected to increase $2 per unit, and fixed cost are expected to increase by $30,000, how many additional units would need to be sold to earn the same net operating income as they are currently earning? Get Finance homework help today

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