Question
In: Accounting
Contribution Margin Harry Company sells 35,000 units at $26 per unit. Variable costs are $17.42 per...
Contribution Margin
Harry Company sells 35,000 units at $26 per unit. Variable costs are $17.42 per unit, and fixed costs are $126,100.
Determine (a) the contribution margin ratio, (b) the unit contribution margin, and (c) income from operations.
| a. Contribution margin ratio (Enter as a whole number.) | % | |
| b. Unit contribution margin (Round to the nearest cent.) | $ | per unit |
| c. Income from operations | $ |
Solutions
Expert Solution
|
contribution margin ratio |
33% |
|
Unit contribution margin |
$8.58 per unit |
|
Income from operations |
$174,200 |
Working:
- Contribution margin ratio=contribution margin/Sales
=(8.58/26)=33%
- Contribution margin=Sales-Variable cost
=(26-17.42)=$8.58 per unit
- Contribution margin at 36000 units=($8.58*35000)=$300,300
Less: Fixed cost=$(126,100)
Income from operations=$174,200
ekkarill92 answered 6 months agoRelated Solutions
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Break-Even Point
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3.) Megan Company has fixed costs of $505,920. The unit selling
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Penny Company sells 25,000 units at $59 per unit. Variable costs are $29 per unit, and...
Penny Company sells 25,000 units at $59 per unit. Variable costs
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b. Contribution margin ratio
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c. Fixed costs per unit at production of
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$
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Sales (10,000units) $ 70,000 Less variable costs (35,000) Contribution margin $ 35,000 Less fixed costs (32,500)...
Sales (10,000units) $ 70,000 Less variable costs (35,000)
Contribution margin $ 35,000 Less fixed costs (32,500) Net income $
2,500 Requirements: 1. Compute Break-even point in units and
explain what the number that you calculated means. 2. Compute
break-even point in sales volume (in dollar) and explain what the
number that you calculated means. 3. How much sales should be in
order to earn a before tax profit of $15000.
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Price, Variable Cost
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Expense
For each of the
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required.
Required:
1. At
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price does Jefferson charge per unit? Note: Round to the
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$
2.
Sooner Industries charges a price of $127 and has fixed cost of
$360,500. Next year, Sooner expects to...
Price, Variable Cost per Unit, Contribution Margin, Contribution Margin Ratio, Fixed Expense For each of the...
Price, Variable Cost per Unit, Contribution Margin, Contribution
Margin Ratio, Fixed Expense
For each of the following independent situations, calculate the
amount(s) required.
Required:
1. At the break-even point, Jefferson Company
sells 95,000 units and has fixed cost of $349,700. The variable
cost per unit is $0.15. What price does Jefferson charge per unit?
Note: Round to the nearest cent.
$
2. Sooner Industries charges a price of $129
and has fixed cost of $421,000. Next year, Sooner expects to...
Price, Variable Cost per Unit, Contribution Margin, Contribution Margin Ratio, Fixed Expense For each of the...
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For each of the following independent situations, calculate the
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$
2. Sooner Industries charges a price of $136
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For each of the following independent situations, calculate the
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Required:
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Note: Round to the nearest cent.
$
2. Sooner Industries charges a price of $98 and
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For each of the following independent situations, calculate the
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Required:
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2. Sooner Industries charges a price of $116
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