Answered: Firebird MFG,Co. has a contribution…

Firebird MFG,Co. has a contribution margin of 40 percent and must sell 80,000 units at a price of $90 each to break even. What is the total fixed cost, and the variable cost per unit?

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

ChapterC: Cases

Section: Chapter Questions

Problem 5.2SB

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Concept explainers

Aggregate Planning Strategies

On the basis of the demand forecast, an organization can complete its business plans. When the business plans are complete, an organization can work backward from the completed total sales to the raw materials needed. Thus, annual and quarterly plans are divided into labor, raw material, working capital, and other demands for a medium-term period (6 months to 18 months). This process of evaluating moderate production requirements is known as aggregate planning.

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Firebird MFG,Co. has a contribution margin of 40 percent and must sell 80,000 units at a price of $90 each to break even.

What is the total fixed cost, and the variable cost per unit?

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