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 $348,600. The variable cost per unit is $0.35. What price does Jefferson charge per unit? Note: Round to the nearest cent.
$

2. Sooner Industries charges a price of $127 and has fixed cost of $360,500. Next year, Sooner expects to sell 19,800 units and make operating income of $198,000. What is the variable cost per unit? What is the contribution margin ratio? Note: 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 $17,600 with a contribution margin ratio of 0.2. Actual revenue was $220,000. Calculate the total fixed cost. Note: Round your answer to the nearest dollar, if required.
$

4. Laramie Company has variable cost ratio of 0.45. The fixed cost is $96,250 and 25,000 units are sold at break-even. What is the price? What is the variable cost per unit? The contribution margin per unit? Note : Do NOT round interim computations. Round answers to the nearest cent.

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

Answer 1

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