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Too Hot to Handle Company Produces Fireworks and Has Provided  Total fixed costs$100,000 Unit variable costs$6Planned unit sales30,000\begin{array} { l } \text { Total fixed costs}&\$100,000 \\ \text { Unit variable costs}& \$6\\ \text {Planned unit sales}&30,000 \\\end{array}

Question 190

Essay

Too Hot To Handle Company produces fireworks and has provided the following information:  Total fixed costs$100,000 Unit variable costs$6Planned unit sales30,000\begin{array} { l } \text { Total fixed costs}&\$100,000 \\ \text { Unit variable costs}& \$6\\ \text {Planned unit sales}&30,000 \\\end{array}
The break- even point is 25,000 units. Required:
a. Compute the selling price per unit.
b. Compute the contribution- margin ratio.
c. Compute the break- even volume in dollars.
d. Compute the margin of safety.

Correct Answer:

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a. $100,000 / 25,000 = $4 + $6...

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