Firebird Mfg. Co. has a contribution margin ratio of 40 percent and must sell 80,000 units at a price of $90 each in order to break even. Compute total fixed costs. Compute variable cost per unit. Develop the company’s cost formula.

Firebird Mfg. Co. has a contribution margin ratio of 40 percent and must sell 80,000 units at a price of $90 each in order to break even. Compute total fixed costs. Compute variable cost per unit. Develop the company’s cost formula.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Firebird Mfg. Co. has a contribution margin ratio of 40 percent and must sell 80,000 units at a price of $90 each in order to break even.

Compute total fixed costs.
Compute variable cost per unit.
Develop the company’s cost formula.

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