Mike purchases a new heavy-duty truck (5 year class recovery property)I for his delivery service on March 30.2019. No other asse
1 answer:
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Solution :
a). At the break even units, the total contribution margin = fixed expenses
We know that : (Selling price - variable cost) x units sold = fixed expenses
i.e. (20-14)x = 225,000
6x = 225,000
x = 37,500
Therefore, the number of units sold, x = 37,500
So, the break even analysis = 37,500 x 20
= 750,000
b).
= 30%
The Breakeven sales =
= 750,000
c).
= 37.5%
d). Units needed :
units
Therefore, the sales required = 62,500 x 20
= 125,000