Choater 5

Question 8
    a. Contribution Margin        1 - Variable Cost %
            1 - 0.65
            0.35 or 35%
    Thus Wanda's Contribution Margin is 35%
    b Break Even Sales        Fixed Cost
            Contribution Margin %
    Fixed Cost         Rent + Utilities + Insurance + Payroll
            $3500 + $1000 + $500 + $4250
            $9,250
     Break Even Sales        $9,250
            35%
            $26,428.57
    Thus, Break Even Sales is $26,428.57
    C. Monthly Sale for Profit $4,000        Fixed Cost + Desired Profit
            Contribution Margin %
            $9,250 + $4,000
            35%
            13,250
            35%
            $37,857.14
    Monthly Sale for Profit $4,000 is $37,857.14
            Cost            Total Cost
    D. Break Even Chart
                        Variable Cost
        26,428.57                Break Even Point
        9,250                Fixed Cost
        0        26,428.57        Sales
Question 9
    a. Break Point in a month        Fixed Cost for a month
            Contribution per unit Sold
    Fixed Cost Per month        Salaries + Insurance + Rent + Utilities per month
            ($2500*4) + ($1200/3) + $3000 +...