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A company manufactures a single product with a variable cost of $22. The contribution to sales ratio is 45%. Monthly fixed costs are $198,000.
What is the breakeven point in units?
A 4950
B 9000
C 20000
D 11000here’s another question
An organisation manufactures a single product which has a variable cost of $36 per unit. The organisation’s total weekly fixed costs are $81,000 and it has a contribution to sales ratio of 40%. This week it plans to manufacture and sell 5,000 units.What is the organisation’s margin of safety this week in units?
A 1,625
B 2,750
C 3,375
D 3,500the answer is B 2750 but I got A 1625 instead from deducting 3375 (the BEP) from the sell of 5000 units
In answer to your question
If VC is 22 and CS ratio is 0.45 or 45% then cont is 45% of sales so VC must be 55% of salesThat is 22 = 0.55
thus 22/0.55 = 40
so sales = 40
and cont = 45% of sales = 18FC/CPU = BE units
198,000 / 18 = 11,000
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