The Chair Center Co., a manufacturer of chairs, has the following data for 2012.
Sales 2,600 units
Sales price $40 per unit
Variable cost $16 per unit
Fixed costs $19,500
Instructions:
(a) What is the contribution margin ratio?
(b) What is the breakeven point in dollars?
(c) What is the margin of safety in dollars and as a ratio?
(d) If the company wishes to increase its total dollar contribution margin by 40% in 2013, by how much will it need to increase its sales if all other factors remain constant?