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Break- even Analysis


I. Breakeven Analysis Lone Star Enterprises sells a single product. The selling price is $40 per unit, and the variable expense is $32 per unit. The company's most recent annual contribution format income statement is presented below: Sales $ 200,000 Variable expenses 1,60,000 Contribution Margin 40,000 Fixed expenses 30,000 Net Operating Income $ 10,000 Required: 1.    Calculate the contribution margin per unit $_______________. 2.    Calculate the contribution margin ratio ________%. 3.    Calculate the break-even point in sales dollars $____________. 4.    Calculate the break-even point in units sold _______________. 5.    Calculate the units that must be sold to obtain a net operating income of $20,000. Units to be sold ______________.