Problem
Wyatt Inc., a multinational manufacturing firm involved in production of architectural millwork like custom molding, panels, book cases and others. Suppose that the Wyatt Inc. is involved in the production of the molding and it is expected to maintain same inventory at the end of the year as at the beginning of the year. Let us suppose the estimated fixed cost is $288, 000, and the estimated variable costs per unit are $14. Also assume that 60,000 units will be sold at price of $20 per unit (Waren). The maximum sales within the relevant range are 70,000 units.
Calculate the following:
Calculate the contribution margin ratio and unit contribution margin. Find out the break-even point in units. Determine the margin of safety. Draw a Cost-Volume-Profit graph and attach it to your posting What are some things that would increase the break-even in units?