In 2010, Runge Company Had a Break-Even Point of $800,000

Essay

In 2010, Runge Company had a break-even point of $800,000 based on a selling price of $10 per unit and fixed costs of $240,000. In 2011, the selling price and variable costs per unit did not change, but the break-even point increased to $900,000.
Instructions
(a) Compute the variable cost per unit and the contribution margin ratio for 2010.
(b) Using the contribution margin ratio, compute the increase in fixed costs for 2011.