Contribution margin ratios

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Reference no: EM131000336

Kumar produces large decorative tiles used in home decor. The tiles sell for $720 and the fixed monthly operating costs are as follows:

Kumar's accountant told him about contribution margin ratios and he understood clearly that for every dollar of sales, $0.60 went to cover his fixed costs, and that anything past that point was pure profit.

Kumar's is planning to increase the selling price to $840. What impact will the increase in selling price have on the breakeven point in units?

Reference no: EM131000336

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