In the month of September Matlock Industries sold 800 units of product. The average sales price was $30. During the month fixed costs were $6300 and variable costs were 70% of sales.
Instructions
(a) Determine the contribution margin in dollars per unit and as a ratio.
(b) Using the contribution margin technique compute the break-even point in dollars and in units.

Contribution Margin

The amount by which the sales revenue of a product exceeds its variable costs, indicating how much contributes towards covering fixed costs and generating profit.

Break-Even Point

The point at which total costs and total revenues are equal, resulting in no net gain or loss for the business.

Fixed Costs

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance premiums, providing stability to a company's expenses.