In 2015 Stallman Co

question 210

Essay

In 2015 Stallman Co. had a break-even point of $800000 based on a selling price of $10 per unit and fixed costs of $200000. In 2016 the selling price and variable costs per unit did not change but the break-even point increased to $840000.
Instructions
(a) Compute the variable cost per unit and the contribution margin ratio for 2015.
(b) Using the contribution margin ratio compute the increase in fixed costs for 2016.

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Definitions:

Caliper Bore

The cylindrical opening in a brake caliper where the piston moves, playing a critical role in the braking system of a vehicle.

Contaminants

Unwanted substances or impurities found within a product, sample, or environment that can affect performance or health.

Bleed Screw

A small valve or screw located on hydraulic systems, such as brakes, used to remove air from the system.

Relay Valve

A valve used in air brake systems that speeds up the application and release of brakes over long distances by shortening the response time.