Electronics Inc sells DVD players for 80 each The unit varia

Electronics, Inc. sells DVD players for $80 each. The unit variable cost per unit is $40 and total fixed costs are $20,000.

What is the contribution margin per DVD player?

What is the breakeven point in players?

How many players must be sold to earn a pretax income of $20,000?

Solution

Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount Selling price per unit                         80.00 Variable Cost per unit                       (40.00) Contribution per DVD Player = 80 - 40                         40.00 Fixed costs                 20,000.00 breakeven point in players = 20,000/40                       500.00 Desired pretax income                 20,000.00 Fixed costs                 20,000.00 Desired contribution = 20000 + 20000                 40,000.00 Contribution per unit                         40.00 players must be sold to earn a pretax income of $20,000 = 40,000/40                   1,000.00