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[solution]: NB Company sold 500.000 widgets for $1,000,000 in Year 1. It also


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NB Company sold 500.000 widgets for $1,000,000 in Year 1. It also incurred variable costs of $200,000 and fixed costs of $400,000 in that year.

What is the contribution per widget?

What is the contribution margin percentage?

How many units must it sell to break even?

How many dollars of revenue must it generate to break even?

How many units must it sell if it wanted to earn an operating profit of

$500,000?


Running head: ACCOUNTING

 


 

1

 


 

Accounting

 

Name

 

Institution

 


 

ACCOUNTING

 


 

2

 

Accounting

 


 

Contribution per widget = (total revenues ?variable costs)/ total units

 

= (1000000 ? (200000+400000))/500

 

=...

 


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