COST ACCOUNTING
BREAK EVEN POINT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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If the selling price per unit is $ 100 and contribution per unit is $ 75, what are the total variable costs if 150 units are sold?
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$ 11, 250
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$ 15, 000
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Not possible to calculate
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$ 3, 750
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Explanation:
Detailed explanation-1: -90000 and variable cost to sales is 75%, contribution is: Rs. 67500 Rs.
Detailed explanation-2: -Variable Cost Formula. To calculate variable costs, multiply what it costs to make one unit of your product by the total number of products you’ve created. This formula looks like this: Total Variable Costs = Cost Per Unit x Total Number of Units.
Detailed explanation-3: -Since you have the contribution margin ratio, you must identify the variable cost ratio and use that figure to determine the total sales. To do so, subtract the contribution margin ratio from 100 to determine the variable cost ratio, and then divide the variable cost amount by that percentage.
There is 1 question to complete.