Blanchard Company manufactures a single product that sells for $180 per unit and whose total variable costs are $135 per unit. The company’s annual fixed costs are $562,500.

(a) Compute the company's contribution margin per unit.
Sales per unit $180 per unit
Less: Variable cost per unit 135 per unit
Contribution margin $45 per unit

(b) Compute the company's contribution margin ratio.
Choose Numerator: / Choose Denominator: = Contribution margin ratio
Contribution margin per unit / Sales per unit = Contribution margin ratio
$45 / $180 = 25.0%

(c) Compute the company's break-even point in units.
Choose Numerator: / Choose Denominator: = Break-even units
Fixed costs / Contribution margin per unit = Break-even units
$562,500 / $45 = 12,500 units

(d) Compute the company's break-even point in dollars of sales.
Choose Numerator: / Choose Denominator: = Break-even dollars
Fixed costs / Contribution margin ratio = Break-even dollars
$562,500 / 25% = $2,250,000