Suppose ABC Corp’s break-even point is revenues of $1,100,000. Fixed costs are $660,000   a. Calculate the contribution margin percentage.    b. Calculate the selling price if variable costs are $16 per unit.    c. Suppose 75 000 units are sold. Calculate the profit earned.

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 9PB: Fire Company is a service firm with current service revenue of $900,000 and a 40% contribution...
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Suppose ABC Corp’s break-even point is revenues of $1,100,000. Fixed costs are $660,000

 

a. Calculate the contribution margin percentage. 

 

b. Calculate the selling price if variable costs are $16 per unit. 

 

c. Suppose 75 000 units are sold. Calculate the profit earned.

 

d. Will the company be profitable if able to sell 30,000 units? Explain. 

 

c. What should the company do to increase its profit above break-even point? 

 

 

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