Answer:
Instructions are below.
Explanation:
Giving the following information:
Selling price= $5.50 for a large bowl of noodles.
Variable costs are $2.75 a bowl.
Fixed costs= $8,750.
To calculate the break-even point in dollars, we need to use the following formula:
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 8,750/ [(5.5 - 2.75)/5.5]
Break-even point (dollars)= $17,500
2)
First, we need to determine the contribution margin:
Contribution margin= sales* contribution margin ratio
Contribution margin= 63,000*0.5= 31,500
Fixed costs= (8,750)
Net operating income= 22,750
