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Drake Company's income statement for the most recent year appears below.

Sales (45,000 units) $1,350,000

Less: variable expenses 750,000

Contribution margin 600,000

Less: fixed expenses 375,000

Net operating income $225,000

Required:

a) Compute the unit contribution margin.

b) Compute the break-even point in dollars.

c) If the company desires a total operating income of $290,000, then how many units must it sell?

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M919328

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