I have an accounting homework question, and just want to be sure I have it down.


You charge $17 for a CD, including shipping. You pay suppliers $13 for the CD. You anticipate fixed costs in the first year to total $1,500,000 and you anticipate losing $1,500,000 on sales.

1. How many units must you sell to achieve no more than $1,500,000 loss in the first year?

2. What is total sales and how m any units must be sold for the company to break even?

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Originally Posted by sfowler123

I have an accounting homework question, and just want to be sure I have it down.


You charge $17 for a CD, including shipping. You pay suppliers $13 for the CD. You anticipate fixed costs in the first year to total $1,500,000 and you anticipate losing $1,500,000 on sales.

1. How many units must you sell to achieve no more than $1,500,000 loss in the first year?

2. What is total sales and how m any units must be sold for the company to break even?

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so you have $4 contribution margin. You don't know your shipping cost. I don't understand this sentence

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you anticipate losing $1,500,000 on sales.

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taken in the ordinary meaning it would say to me sales are 0

FC/CM = Pb (units)