viva sells its waterproof phone case for $95 per unit. fixed costs total $119,700, and variable costs are…

viva sells its waterproof phone case for $95 per unit. fixed costs total $119,700, and variable costs are $38 per unit. (1) determine the contribution margin per unit. (2) determine the break - even point in units.

viva sells its waterproof phone case for $95 per unit. fixed costs total $119,700, and variable costs are $38 per unit. (1) determine the contribution margin per unit. (2) determine the break - even point in units.

Answer

Explanation:

Step1: Calculate contribution margin per unit

Contribution margin per unit = Selling price per unit - Variable cost per unit. Given selling price per unit = $95 and variable cost per unit = $38. So, $95 - 38$.

Step2: Find break - even point in units

Break - even point in units = Fixed costs / Contribution margin per unit. Fixed costs = $119700 and contribution margin per unit is the result from Step 1. So, $119700\div(95 - 38)$.

Answer:

(1) Contribution margin per unit: $95 - 38=57$ dollars per unit (2) Break - even units: $\frac{119700}{95 - 38}=\frac{119700}{57}=2100$ units