A Company Sells a Single Product That Has a Contribution

question 65

Essay

A company sells a single product that has a contribution margin ratio of 24%. If the company's total fixed costs are $84,000, what is the break-even point in dollar sales?

Grasp the importance and benefits of trade and specialization for individuals and economies.

Understand the function of markets and the role of households and firms within them.

Comprehend the impact of government actions on economic outcomes and the concept of market failure.

Recognize the principles guiding individual decision-making in economics.

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Definitions:

Direct Labor Hours

The total hours of work directly involved in the production of goods, often used in costing and operational efficiency analysis.

Materials Handling

The movement, protection, storage, and control of materials and products throughout manufacturing, warehousing, distribution, consumption, and disposal.

Activity Rate

A measure used in activity-based costing to assign overhead costs to products or services, based on specific activities.

Cost Pool

A grouping of individual costs, typically by department or service center, from which cost allocations are made to products or services.