Sunn Company manufactures a single product that sells for $180 per unit and whose vanable costs are $135 per us. The compan annual fixed costs are $562.500. (1) Prepare a contribution margin income statement at the break-even point (2) If the company’s fixed costs increase by $135,000, what amount of sales (in dollars) is needed to break even? Complete this question by entering your answers in the tabs below. Required Required 2 question 4. the drop down menus are the phrases to choose from, help please 25 Q Prepare a contribution margin income statement at the break-even point SUNN COMPANY Contribution Margin Income Statement fat freak-Eveni<\/p>\n\n\n\n
The Correct Answer and Explanation is :<\/strong><\/mark><\/p>\n\n\n\n SUNN COMPANY<\/strong> 1. Sales at Break-Even Point:<\/strong> To calculate the sales at the break-even point, you need to know the contribution margin per unit<\/strong> and the fixed costs<\/strong>.<\/p>\n\n\n\n Contribution margin per unit<\/strong> = Sales price – Variable costs At the break-even point, the total contribution margin needs to cover the total fixed costs. To calculate the number of units required to break even, you divide the fixed costs by the contribution margin per unit:<\/p>\n\n\n\n Units to break even<\/strong> = Fixed costs \/ Contribution margin per unit Sales at break-even<\/strong> = Units to break even \u00d7 Sales price per unit Thus, at the break-even point, the company needs to generate $1,125,000 in sales<\/strong>.<\/p>\n\n\n\n 2. Sales Needed to Break Even After Fixed Costs Increase by $135,000:<\/strong><\/p>\n\n\n\n If the fixed costs increase by $135,000, the new total fixed costs become:<\/p>\n\n\n\n New fixed costs = Original fixed costs + Increase in fixed costs Now, we calculate the new sales needed to break even:<\/p>\n\n\n\n Units to break even<\/strong> = New fixed costs \/ Contribution margin per unit Sales needed to break even<\/strong> = Units to break even \u00d7 Sales price per unit Sunn Company manufactures a single product that sells for $180 per unit and whose vanable costs are $135 per us. The compan annual fixed costs are $562.500. (1) Prepare a contribution margin income statement at the break-even point (2) If the company’s fixed costs increase by $135,000, what amount of sales (in dollars) is needed […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-183250","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/183250","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=183250"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/183250\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=183250"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=183250"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=183250"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Contribution Margin Income Statement at the Break-Even Point:<\/h3>\n\n\n\n
Contribution Margin Income Statement at Break-Even Point<\/strong><\/p>\n\n\n\nDescription<\/strong><\/th> Amount<\/strong><\/th><\/tr><\/thead> Sales<\/strong><\/td> $1,125,000<\/td><\/tr> Variable Costs<\/strong><\/td> $945,000<\/td><\/tr> Contribution Margin<\/strong><\/td> $180,000<\/td><\/tr> Fixed Costs<\/strong><\/td> $562,500<\/td><\/tr> Net Income<\/strong><\/td> $0<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
\n\n\n\nExplanation of the Contribution Margin Income Statement at the Break-Even Point:<\/h3>\n\n\n\n
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= $180 – $135 = $45<\/p>\n\n\n\n
= $562,500 \/ $45 = 12,500 units<\/p>\n\n\n\n
= 12,500 \u00d7 $180 = $1,125,000<\/p>\n\n\n\n
\n\n\n\n
= $562,500 + $135,000 = $697,500<\/p>\n\n\n\n
= $697,500 \/ $45 = 15,500 units<\/p>\n\n\n\n
= 15,500 \u00d7 $180 = $2,790,000<\/strong><\/p>\n\n\n\n
\n\n\n\nSummary:<\/h3>\n\n\n\n
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