Rooney Company reported the following data regarding the product it sells: Sales price Contribution margin ratio Fixed costs %24 75 20% $450,000 Required Use the contribution margin ratio approach and consider each requirement separately. a. What is the break-even point in dollars? In units? b. To obtain a profit of $45,000, what must the sales be in dollars? In units? c. If the sales price increases to $80 and variable costs do not change, what is the new break-even point in dollars? In units? a. Break-even point in dollars Break-even point in units b. Sales in dollars Sales in units c. Break-even point in dollars Break-even point in units

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Rooney Company reported the following data regarding the product it sells:
6.
$4
Sales price
Contribution margin ratio
Fixed costs
75
20%
$450,000
Required
Use the contribution margin ratio approach and consider each requirement separately.
a. What is the break-even point in dollars? In units?
b. To obtain a profit of $45,000, what must the sales be in dollars? In units?
c. If the sales price increases to $80 and variable costs do not change, what is the new break-even point in dollars? In units?
a. Break-even point in dollars
Break-even point in units
b. Sales in dollars
Sales in units
c. Break-even point in dollars
Break-even point in units
Transcribed Image Text:Rooney Company reported the following data regarding the product it sells: 6. $4 Sales price Contribution margin ratio Fixed costs 75 20% $450,000 Required Use the contribution margin ratio approach and consider each requirement separately. a. What is the break-even point in dollars? In units? b. To obtain a profit of $45,000, what must the sales be in dollars? In units? c. If the sales price increases to $80 and variable costs do not change, what is the new break-even point in dollars? In units? a. Break-even point in dollars Break-even point in units b. Sales in dollars Sales in units c. Break-even point in dollars Break-even point in units
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