The following information describes a product expected to be produced and sold by Hadley Company:
$\begin{array}{ll}
\text { Selling price } & \$ 80 \text { per unit } \
\text { Variable costs } & \$ 32 \text { per unit } \
\text { Total fixed costs } & \$ 630,000
\end{array}$

Required:
a.Calculate the contribution margin ratio.
b.Calculate the break-even point in dollar sales.
c.What dollar amount of sales would be necessary to achieve a pretax income of $120,000?

Question

The following information describes a product expected to be produced and sold by Hadley Company:
 $\begin{array}{ll}
\text { Selling price } & \$ 80 \text { per unit } \
\text { Variable costs } & \$ 32 \text { per unit } \
\text { Total fixed costs } & \$ 630,000
\end{array}$
 
Required:
a.Calculate the contribution margin ratio.
b.Calculate the break-even point in dollar sales.
c.What dollar amount of sales would be necessary to achieve a pretax income of $120,000?

Quizplus · Accepted Answer

The Answer of The following information describes a product expected to be produced and sold by Hadley Company:
 $\begin{array}{ll}
\text { Selling price } & \$ 80 \text { per unit } \
\text { Variable costs } & \$ 32 \text { per unit } \
\text { Total fixed costs } & \$ 630,000
\end{array}$
 
Required:
a.Calculate the contribution margin ratio.
b.Calculate the break-even point in dollar sales.
c.What dollar amount of sales would be necessary to achieve a pretax income of $120,000?

The Following Information Describes a Product Expected to Be Produced