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What is the contribution margin per unit

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Question - Yoni Corporation manufactures skateboards and is in the process of preparing next year's budget. The pro forma income statement for the current year is presented below:

Sales (60,000 units) $1,800,000

Cost of Sales:

Direct Materials $300,000

Direct Labor $180,000

Variable Overhead $ 90,000

Fixed Overhead $100,000

Gross Profit $ 1,130,000

Selling G & A

Variable $240,000

Fixed 250,000

Operating Income $640,000

Compute the following:

(1) What is the contribution margin per unit?

(2) What is the breakeven point in units?

(3) Assume that for the coming year, the management of Yoni anticipates a 10 percent increase in the sales price, a 12 percent increase in variable costs, and a $45,000 increase in fixed expenses. What would be the breakeven point in units for the coming year?

Reference no: EM131772369

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