Seaquest Company's contribution margin income statement is presented below. Sales for the current period consisted of 5,000 units. Determine the company's break-even point in dollars. Seaquest CompanyContribution Margin Income Statement?Sales$125,000Variable costs90,000Contribution margin35,000Fixed costs28,000Net income$7,000
What will be an ideal response?
Per unit costs:
Sales price = $125,000/5,000 = $25
Variable cost = $90,000/5,000 = $18
Contribution margin ratio = ($25 - $18)/$25 = .28
Break-even in dollars = $28,000/.28 = $100,000
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