1. The contribution margin per person would be:
Price per ticket ... $35
Less variable expenses:
Dinner ... $18
Favors and program... 2 20
Contribution margin per person ... $15
The fixed expenses of the dinner-dance total $6,000. The break-even
point would be:
Sales = Variable expenses + Fixed expenses + Profits
$35Q = $20Q + $6,000 + $0
$15Q = $6,000
Q = $6,000 ÷ $15 per person
Q = 400 persons; or, at $35 per person, $14,000
Alternative solution:
Fixed expenses
Break-even point= in unit sales Unit contribution margin
$6,000
= = 400 persons
$15 per person
or, at $35 per person, $14,000.
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