Question

For each of the following independent situations, calculate the amount(s) required. Required: 1. At the break-even point, Jefferson Company sells 115,000 units and has fixed cost of $349,600. The variable cost per unit is $4.56. What price does Jefferson charge per unit? Note: Round your answer to the nearest cent.

Answer 1

Answer:

$7.60 per unit

Explanation:

Given that,

Break-even units = 115,000

Fixed cost = $349,600

Variable cost per unit = $4.56

Contribution margin per unit:

= Fixed cost ÷ Break-even unit

= $349,600 ÷ 115,000

= $3.04

Contribution margin per unit = Selling price per unit - Variable cost per unit

$3.04 = Selling price per unit - $4.56

$3.04 + $4.56 = Selling price per unit

$7.60 = Selling price per unit