The Cornish Corporation has budgeted fixed costs of $125,000 and an estimated selling price of $16.50 per unit. The contribution margin ratio is 40% and the company plans to sell 25,000 units in 2021.
Required:
(a) Compute the break-even point in dollars.
(b) Compute the margin of safety for 2021.
(c) Compute the expected operating profit for 2021.

Question

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The Answer of The Cornish Corporation has budgeted fixed costs of $125,000 and an estimated selling price of $16.50 per unit. The contribution margin ratio is 40% and the company plans to sell 25,000 units in 2021.
Required:
(a) Compute the break-even point in dollars.
(b) Compute the margin of safety for 2021.
(c) Compute the expected operating profit for 2021.

The Cornish Corporation Has Budgeted Fixed Costs of $125,000 and an Estimated