Question

Cost-Volume-Profit Relations: Missing Data
Following are data from 4 separate companies. Supply the missing data in each independent case

	Case A	Case B	Case C	Case D
Unit Sales	1,000	800	Answer	Answer
Sales revenue	$20,000	Answer	Answer	$60,000
Variable cost per unit	$10	$2	$10	Answer
Contribution margin	Answer	$800	Answer	Answer
Fixed Costs	$8,100	Answer	$60,000	Answer
Net income	Answer	$600	Answer	Answer
Unit contribution margin	Answer	Answer	Answer	$13
Break-even point (units)	Answer	Answer	4,000	2,000
Margin of safety (units)	Answer	Answer	100	1,000

Answer 1

Ans: For Case A

A). Contribution Margin= Selling Price- Variable Cost

=> 20,000-{1000*10}

=> 10,000

B). Net Income= Contribution margin- Fixed Costs

=> 10,000-8,100

=> 1,900

C). Unit Contribution Margin= Contribution Margin/ No of Units Sold
=> 10,000/1,000

=> $10

D). break-even Units= Fixed Cost/ Contribution Margin Per unit

=> 8,100/10

=>810 Units

E). Margin of Safety{Units}= Budgeted Units- Break-even Units

=> 1,000-810

=> 190 Units

For Case B

F). Contribution Margin= Sales- Variable costs

800=Sales-1,600

Sales= 2,400

G). Net income= Contribution Margin- Fixed Costs

=> 600= 800-Fixed costs

=> Fixed Costs= 200

H). Unit Contribution Margin= Contribution Margin/ No of Units

=> 800/800

=> 1 Per unit

I). Break-even Point in Units= Fixed Cost/ Contribution Margin Per unit

=> 200/1

=> 200

J). Margin of Safety= Budgeted Units- Break-even Units

=> 800-200

=> 600