Which month was more profitable for the company

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Reference no: EM133382639

Question: The company produces one type of goods - dresses. The price of the dress in January was $10 per unit. The company estimates the variable cost of making one dress at $7 per unit, and fixed costs at $ 5,100 in general.

In March the company expects an increase in variable costs per unit by 10% with fixed costs in general the same. The price of dress will not change. The expected level of sales is 2000 units in January and 2200 units in March.

Calculate

1) Contribution Margin per unit in January and in March

2) BEP in January and March in physical units and in monetary terms ($)

3) Net income of the company in January and March

4) Which month was more profitable for the company? Why do you think variable costs could increase?

Reference no: EM133382639

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