The following information describes a product expected to be produced and sold by Quark Corporation:Selling price……………………………$33 per unitVariable costs…………………………$27 per unitTotal fixed costs………………………$855,000 per yearRequired:(a) Calculate the contribution margin per unit.(b) Calculate the break-even point in units.
What will be an ideal response?
(a) Contribution margin = $33 - $27 = $6 per unit
(b) Break-even point in units = $855,000/$6 per unit =142,500 units
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