Ea5.
lo 3.2maple enterprises sells a single product with a selling price of $75 and variable costs per unit of $30. the company’s monthly fixed expenses are $22,500.

what is the company’s break-even point in units?
what is the company’s break-even point in dollars?
construct a contribution margin income statement for the month of september when they will sell 900 units.
how many units will maple need to sell in order to reach a target profit of $45,000?
what dollar sales will maple need in order to reach a target profit of $45,000?
construct a contribution margin income statement for maple that reflects $150,000 in sales volume.

Instructions are listed below

Explanation:

Giving the following information:

selling price= $75

variable costs per unit of $30

The monthly fixed expenses are $22,500.

a) Break-even point= fixed costs/ contribution margin

Break-even point= 22,500/(75 - 30)= 500 units

b) Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= 22,500/(45/75)= $37,500

c) Contribution margin income statement:

Sales= 75*900= 67,500

Variable cost= 900*30= (27,000)

Contribution margin= 40,500

Fixed costs= (22,500)

Net operating income= 18,000

d) Profit= 45,000

Break-even point= (fixed costs + target profit)/ contribution margin

Break-even point= 67,500/45= 1,500 units

e) Break-even point (dollars)= (fixed costs + target profit)/ contribution margin ratio

Break-even point (dollars)=  67,500/(45/75)= $112,500

f) Contribution margin income statement:

Sales= 150,000

Variable costs= (2,000*30)= (60,000)

Contribution margin= 90,000

Fixed costs= (22,500)

Net operating income= 67,500