The Following Information Describes a Product Expected to Be Produced

question 106

Essay

The following information describes a product expected to be produced and sold by Quark Corporation:
$\begin{array}{llr} \text { Selling price} & \text {\$ 33 per unit } \\ \text {Variable costs } & \text { \$ 27 per unit } \\ \text { Total Fixed costs } & \text {\$ 855,000 per year } \end{array}$

Required:
(a) Calculate the contribution margin per unit.
(b) Calculate the break-even point in units.

---

Definitions:

Uniform Commercial Code

A set of laws that provide a standardized and comprehensive framework for the regulation of commercial transactions across the United States.

Cure

A breaching party’s right to provide conforming goods when nonconforming goods were initially delivered; subject to a reasonable time test.

Perfect Tender Rule

A legal principle in commercial law that sellers must deliver goods that exactly meet the terms of the contract without any deviation.

Material Breach

A substantial breach of a significant term or terms of a contract that excuses the nonbreaching party from further performance under the contract and gives the nonbreaching party the right to recover damages.