The Ornate Company Produces a Single Product and Has Total

question 71

Essay

The Ornate Company produces a single product and has total costs ranging from $321,875 (at 20,000 units) to $966,875 (at 80,000 units). Sales volume in 2020 was 32,000, and operating income was $45,125. Ornate's product is highly specialized; therefore, no units are kept in inventory.
Required:
(a.) Determine the cost equation for Ornate's costs.
(b.) Prepare a contribution margin income statement for 2020 including separate columns for total dollars, per unit dollars, and percentages.
(c.) Determine the break-even point (in units and in dollars).

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Definitions:

Buyer's Market

A market condition characterized by an abundance of goods available, giving buyers an advantage over sellers in price negotiations.

Shortage of Goods

A situation where the demand for a product exceeds the supply available in the market, often leading to higher prices and unmet consumer needs.

Organization Marketing

Organization marketing refers to the strategies and efforts employed by organizations to promote themselves, their values, and objectives to attract support or clients.

Websites

Collections of web pages and related content identified by a common domain name and published on at least one web server.