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Homework answers / question archive / Break-Even (Sales Dollars) Fixed expenses total $28,678, the break-even sales in dollars is $92,512, and the selling price per unit is $98
Break-Even (Sales Dollars) Fixed expenses total $28,678, the break-even sales in dollars is $92,512, and the selling price per unit is $98. Calculate the variable expense per unit (round to the nearest cent).
Computation of Variable Expenses per Unit:
Break-even Sales in Dollars = Fixed Cost/Contribution Margin Ratio
$92,512 = $28,678/Contribution Margin Ratio
Contribution Margin Ratio = $28,678/$92,512
Contribution Margin Ratio = 31.00%
Contribution Margin Ratio = (Selling Price per Unit-Variable Expenses per Unit)/Selling Price per Unit
Contribution Margin Ratio*Selling Price per Unit = Selling Price per Unit-Variable Expenses per Unit
31.00%*98 = 98 - Variable Expenses per Unit
Variable Expenses per Unit = 98 - 30.38
Variable Expenses per Unit = $67.62 per unit
