Music Now plans to sell 6,000 MP3 players at $60 each in the coming year. Variable cost per unit is $12 and total fixed cost is $24,000.
Required:
A.) Calculate the variable cost ratio.
B.) Calculate the contribution margin ratio.
C.) Calculate the break-even point in sales dollars.
D.) If Music Now has a target profit of $90,000, how many MP3 players will they have to sell?

Question

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The Answer of Music Now plans to sell 6,000 MP3 players at $60 each in the coming year. Variable cost per unit is $12 and total fixed cost is $24,000.
Required:
A.) Calculate the variable cost ratio.
B.) Calculate the contribution margin ratio.
C.) Calculate the break-even point in sales dollars.
D.) If Music Now has a target profit of $90,000, how many MP3 players will they have to sell?

Music Now Plans to Sell 6,000 MP3 Players at $60