Question - Spears Music, Inc. produces a hip-hop CD that is sold for $15. The contribution margin ratio is 40%. Fixed expenses total $6,750.
Instructions
(a) Compute the variable cost per unit.
(b) Compute how many CDs Spears Music will have to sell in order to break even.
(c ) Compute how many CDs Spears Music will have to sell in order to make a target net income of $16,200.