In 2015, Stallman Co. had a break-even point of $800,000 based on a selling price of $10 per unit and fixed costs of $200,000. In 2016, the selling price and variable costs per unit did not change, but the break-even point increased to $840,000.
(a) Compute the variable cost per unit and the contribution margin ratio for 2015. (Round variable cost to 2 decimal places, e.g. 52.75.)
Variable cost $ per unit
Contribution margin ratio
%
b). Using the Contribution Margin Ratio, compute the increase in fixed costs for 2016