Answer:
Break-even point dollars
= Fixed cost
Contribution margin ratio
= $12,600
0.73
= $17,260
Contribution per unit = Selling price - Variable cost per unit
= $45 - $12
= $33
Contribution margin ratio = Contribution per unit
Selling price per unit
= $33
$45
= 0.73
Explanation:
In this case, we need to calculate contribution per unit, which is selling price minus variable cost per unit. Then, we will determine the contribution margin ratio, which is contribution per unit divided by selling price. Finally, we will determine the break-even sales in dollars, which is fixed cost divided by contribution margin ratio.
