Sunbeam wants to sell microwaves at a unit contribution margin of $42 and a unit contribution rate of 60%. What should be the break even volume if the total cost of production is kept below $10 000.
A) 143
B) 238
C) 357
D) 714
E) 900

Question

Quizplus · Accepted Answer

To find the break-even volume, we first calculate the selling price using the contribution margin and rate: Selling Price = Contribution Margin / Contribution Rate = $42 / 0.60 = $70. The break-even volume is then Total Fixed Costs / Contribution Margin per Unit = $10,000 / $42 ≈ 238.

Sunbeam Wants to Sell Microwaves at a Unit Contribution Margin