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Contribution margin and Break even pointPerrson Company makes two types of backpacks. Data for the
company’s activity during a typical month are presented below:School HikerModel ModelSales units 40,000 40,000Selling price per unit Variable expense per unit $2 $10The company’s total fixed expenses are $80,000. There are no
beginning or ending inventories.Required:a. What is
the per unit contribution margin for each of the two models?
b. What is
the break-even point in terms of sales dollars if the sales mix remains
constant?