In: Accounting
1. The following information is for Nichols Company: Selling price $120 per unit Variable costs $50 per unit Total fixed costs $300,000 What is the contribution margin per unit?
2. The following information is for Nichols Company: Selling price $110 per unit Variable costs $80 per unit Total fixed costs $310,000 What is the operating income if 10,000 units are sold?
3. The following information is for Nichols Company: Selling price $120 per unit Variable costs $90 per unit Total fixed costs $315,000 What is the break-even point?
4. The following information is for Nichols Company: Selling price $130 per unit Variable costs $60 per unit Total fixed costs $315,000 How many units need to be sold to achieve an operating income of $157500?
Solution 1.
Selling prices $120 per unit
Variable cost $50 per unit
Total fixed cost $300000
Contributions margin per unit=+selling price per unit - variable cost per unit)
=( $120 -$50)
= $70
2.
Selling prices =$110 per unit
Variable cost= $80 per unit
Fixed cost =$310000
Unit sold =10000unit
Calculateion of operating profit /loss
Sales( 10000unit ×110 p.u) | 1100000 |
Less variable cost(10000×80) | 800000 |
Contributions | 300000 |
Less Fixed cost | 310000 |
Operating loss | 10000 |
3.
Calculateion of break even point. ?
Selling prices= $120p.u
Variable cost=$90p.u
Total Fixed cost=$315000
Break even point= Fixed cost/ contributions per unit
= (315000/120-90)
= 10500 unit
In amount . =( 10500×120p.u)=$1260000
4.
Calculateion of number of unit sold
Selling price=$130 p.u
Variable cost=$ 60 p.u
Total fixed cost= $ 315000
Operating income = $157500
P.v ratio = contributions p.u/selling price per.u
= 70/130
= 53.84%
Number of unit sold=( fixed cost+ profit/p.v ratio)
=[ 315000+157500/53.84%]
= 742500