Cost-volume profit analysis recline company is planning to produce and sell 11,250 units of its only product at a unit price of $106. at this sales level recline company will generate $405,000 in total contribution margin and incur fixed costs of $25/unit. a. calculate recline’s contribution margin ratio. round answer to the nearest whole percentage (ex: 0.3456 = 35%) answer % b. calculate the break-even point in sales dollars for recline. use your rounded answer from part a. above and then round final answer to the nearest dollar. $answer

Calculate Recline’s contribution margin ratio.  

Contribution Margin RATIO  34%

Calculate the break-even point in sales dollars for Recline.    

Break-Even Point  $1.030.556

Explanation:

      Income Statement

11.250      Quantities

$106          Unit Price

$1,192,500Sales

-$787,500Cost of goods sold

$405,000Contribution Margin  34%

-$281,250Fixed Cost

$123,750Operating Income

 BREAK EVEN POINT

9.722        Quantities

$106        Unit Price

$1,030,556Sales

-$787,500Cost of goods sold

$243,056Contribution Margin

-$243,056Fixed Cost

$0            Operating Income

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