Due to an increase in labor rates, the company estimates that variable costs will increase by $3.36 per skateboard next year.

Due to an increase in labor rates, the company estimates that variable costs will increase by $3.36 per skateboard next year. If this change takes place and the selling price per skateboard remains constant at $42.00, what will be the new CM ratio and the new break-even point in skateboards? I know this is CM ratio= 32% BE= 35000….Refer again to the data in (2) above. The president has decided that the company may have to raise the selling price of its skateboards. If Tyrene Products wants to maintain the same CM ratio as last year, what selling price per skateboard must it charge next year to cover the increased labor costs??? How do I do this?

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