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The following information relates to the only product sold by Harper

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The following information relates to the only product sold
by Harper Company:
Compute the contribution margin ratio and the dollar sales
volume required to break even.
Assuming that the company sells 20,000 units during the
current year, compute the margin of safety (in
dollars).Sales price per unit$45Variable cost per
unit27Fixed costs per year299,000
a.
Compute the contribution margin ratio and the dollar sales
volume required to break even. Contribution margin
ratio%Break even sales dollars
Solution
a)
Contribution Margin ratio
Contribution margin per unit = Sale price per unit -
Variable cost per unit = $45 - $27 = $18
Contribution margin ratio = Contibution Margin per
unit/Sale price per unit = $18/$45 = 0.4
Break even sales dollar
Break even sales = Fixed Cost/ Contribution margin ratio =

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The following information relates to the only product sold by Harper Company: Compute the contribution margin ratio and the dollar sales volume required to break even. Assuming that the company sells 20,000 units during the current year, compute the margin of safety (in dollars).Sales price per unit$45Variable cost per unit27Fixed costs per year299,000 a. Compute the contribution margin ratio and the dollar sales volume required to break even. Contribution margin ratio%Break even sales dollars Solution a) Contribution Margin ratio Contribution margin per unit = Sale price per unit Variable ...
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Anonymous
Awesome! Perfect study aid.

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