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John Moffat.
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nk16
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Hello..
I didn’t understand how they found the profit mark up …first they were using foh for the year then they took foh per unit..it’s confusing me …how to do this qn plz explain
John Moffat
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For breakeven, the contribution must equal the fixed overheads and must therefore be $20,000.
They budget on selling 500 units per year, and therefore for breakeven the contribution must be $20,000 / 500 = $40 per unit.
The marginal cost is $20 per unit and therefore the mark-up on marginal cost must be 40/20 = 200%
Have you watched my free lectures on CVP analysis?
nk16
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