Math Problem Statement
The data to the right pertain to the operating budget of a manufacturing company. Compute the following. (a) contribution margin (b) contribution rate (c) break-even point in sales dollars
Sales = $1220000 Fixed cost =$105000 Total variable cost =$634400 Total cost=$ 739400 Net income =$480600
Solution
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Math Problem Analysis
Mathematical Concepts
Cost Accounting
Break-Even Analysis
Financial Ratios
Formulas
Contribution Margin (CM) = Sales - Total Variable Cost
Contribution Rate (CR) = Contribution Margin / Sales
Break-Even Point in Sales Dollars (BE) = Fixed Cost / Contribution Rate
Theorems
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Suitable Grade Level
Grades 10-12
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