Cost Accounting (15th Edition)

Published by Prentice Hall
ISBN 10: 0133428702
ISBN 13: 978-0-13342-870-4

Chapter 3 - Cost-Volume-Profit Analysis - Assignment Material - Problems - Page 100: 3-36(4)

Answer

Breakeven Point (in revenues) = $214,500 \div 0.4714 ≈ $454,818.65

Work Step by Step

Breakeven Point in Revenues for 2015 with Additional Advertising Cost: Breakeven Point (in revenues) = Total Fixed Costs $\div$ Contribution Margin Ratio Contribution Margin Ratio = Contribution Margin per Unit $ \div $ Selling Price per Unit Contribution Margin Ratio = $16.50 \div $35 ≈ 0.4714
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