Question

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 85,000 units and has fixed cost of $349,900. The variable cost per unit is $0.20. What price does Jefferson charge per unit? Round to the nearest cent.
$

2. Sooner Industries charges a price of $93 and has fixed cost of $481,500. Next year, Sooner expects to sell 19,300 units and make operating income of $175,000. What is the variable cost per unit? What is the contribution margin ratio? Round your variable cost per unit answer to the nearest cent. Enter the contribution margin ratio as a percentage, rounded to two decimal places.

Variable cost per unit	$
Contribution margin ratio		%

3. Last year, Jasper Company earned operating income of $28,920 with a contribution margin ratio of 0.3. Actual revenue was $241,000. Calculate the total fixed cost. Round your answer to the nearest dollar, if required.
$

4. Laramie Company has variable cost ratio of 0.55. The fixed cost is $102,650 and 21,900 units are sold at breakeven. What is the price? What is the variable cost per unit? The contribution margin per unit? (Round answers to the nearest cent.)

Price	$
Variable cost per unit	$
Contribution margin per unit	$

Answer 1