Chapter 21, Problem 9E

To determine

Contribution margin means sales price less variable costs.Contribution represents the portion of sales revenue that is not consumed by variable costs and so contributes to the coverage of fixed costs.

Contribution margin ratio means the difference between a company's sales and variable expenses, expressed as a percentage.

The contribution margin ratio is a formula that calculates the percentage of contribution margin relative to net sales, put into percentage terms.

The break-even point formula is calculated by dividing the total fixed costs of production by the price per unit less the variable costs to produce the product.

Break-even Point in Sales Dollars can be determined by dividing the company's total fixed expenses by the contribution margin ratio. The ratio can be calculated using company totals or per unit amounts.

To Calculate:

The contribution margin, contribution margin ratio, break even point in units and in dollars calculated is asked to be calculated in the specific question.