Asked Dec 21, 2019

Once a company exceeds its breakeven level, operating income can be calculated by multiplying:

  1. The sales price by unit sales in excess of breakeven units.
  2. Unit sales by the difference between the sales price and fixed cost per unit.
  3. The contribution margin ratio by the difference between unit sales and breakeven sales.
  4. The contribution margin per unit by the difference between unit sales and breakeven sales.

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