Asked by Rhyana Delgado on Jul 14, 2024
Verified
A company expects to sell 30,000 ball hats at $35 each. The estimated variable cost of each hat is $12.50, and the fixed costs are estimated to be $450,000. Calculate the contribution margin per unit and the break-even point in units and revenue.
Contribution Margin
A financial metric that represents the difference between the sales revenue of a product and the variable costs associated with producing that product.
Break-Even Point
The financial position at which total revenues equal total costs and expenses, with no net profit or loss, often used to analyze the viability of a business or project.
Variable Cost
Costs that change in proportion to the level of goods or services that a business produces, as opposed to fixed costs which remain constant regardless of production volume.
- Understand and calculate the contribution margin per unit for a product.
- Determine the break-even point in units and revenue for a product or service.
Verified Answer
Learning Objectives
- Understand and calculate the contribution margin per unit for a product.
- Determine the break-even point in units and revenue for a product or service.
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