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?

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Business

Ali Sanford

14 November, 00:02

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?

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Zackary Ballard · 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

Explanation:

870000 X $1.50 = $1,305,000

20/100 = 0.2

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