# Break Even Accounting

Break Even Accounting

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1. Determine the missing amounts in the following table:

Unit Sales Price                       Unit Variable Costs                     Unit Contribution Margin          Contribution Margin Ratio

22.00                                                \$10                                         \$____________________        _______________

____________                            \$10                                           24.00                                                  __________________

50.00                                     _________________               ______________________            25%

2. Calculating Contribution Margin and Contribution Margin Ratio

Juniper Enterprises sells handmade clocks. Its variable cost per clock is \$6, and each clock sells for \$24. Calculate Junipers contribution margin per unit and contribution margin ratio. If the companys fixed costs total 6,660, detemine how many clocks juniper must sell to break even

3. How many units must Juniper  sell to earn a profit of atleast 5,400

4. Suppose Juniper raises its price by 20 percent, but costs do not change. What is its new break even point?

5. Laguna Print makes advertising hangers that are placed on doorknobs. It charges 0.04 and estimates its variable cost to be 0.01 per hanger. Lagunas total fixed cost is \$4,500 per month, which consists primarily of printer depreciation and rent. Calculate the number of advertising hangers that Laguna must sell in order to break even.

6. Jasper Company has sales of \$185,000 and a break even sales point of 120,000. Compute Jaspers margin of safety and its margin of safety ratio

7. Heather Hudson makes stuffed teddy bears. Recent information for her business follows.

selling price per bear =35

total fixed cost per month=1,500

variable cost per bear = 24

If heather wants to earn 1,250 in profit next month, how many bears will she have to sell

8.If she sells 275 bears next month, determine the margin of safety units, sales dollars, and as a percentage of sales.

9. Seascape Company has two products: Product a has a contribution margin per unit of \$4 and Product B has a contribution of \$6 per unit. Calculate the weighted average unit contribution margin if Seascape has a 25/75 product mix. Explain how a shift in the product mix would affect Seascapes weighted average contirbution margin and its break even point