Question

Juniper Enterprises sells handmade clocks. Its variable cost per clock is $6, and each clock sells for $24. Calculate Juniper’s contribution margin per unit and contribution margin ratio. If the company’s fixed costs total $6,660, determine how many clocks Juniper must sell to break even.

Answer 1

Answer:

The break even units of clock is 370 units.

Explanation:

Juniper Enterprises sells handmade clocks.

The variable cost per clock is $6.

The price of per unit of clock is $24.

The contribution margin per unit

= Sales - Variable cost

= $24 - $6

= $18

Break even units

= $\frac{Total\ fixed\ costs}{Contribution\ unit}$

= $\frac{6,660}{18}$

= 370 units