Question

Crane Company is planning to sell 870000 units for $1.50 per unit. The contribution margin ratio is 20%. If Crane will break even at this level of sales, what are the fixed costs?

Answer 1

Crane Company is planning to sell 870000 units for $1.50 per unit. The contribution margin ratio is 20%. If Crane will break even at this level of sales, what are the fixed costs?

$261,000 would be the fixed cost

Step-by-step explanation:

870000 X $1.50= $1,305,000

20/100= 0.2

0.2 X 1,305,000= $261, 000