Question #1: Orion, Inc. sold 17,000 units last year for $50 each. Variable costs per unit...

Question #1: Orion, Inc. sold 17,000 units last year for $50 each. Variable costs per unit were $20 for direct materials, $15 for direct labor, and $10 for variable overhead. Fixed costs were $10,000 in manufacturing overhead and $50,000 in nonmanufacturing costs.
a. What is the total contribution margin?
b. What is the unit contribution margin?
c. What is the contribution margin ratio?
d. If sales increase by 5,000 units, by how much will profits increase?

Question #2: Acme Company sold 500 units for $450 each. Variable costs were $275 per unit, and total fixed expenses were $53,000. Prepare a contribution margin income statement.

Expert Solution

ekkarill92 answered 1 year ago

Orion, Inc. sold 17,000 units last year for $50 each. Variable costs per unit were $20...

Orion, Inc. sold 17,000 units last year for $50 each. Variable costs per unit were $20 for direct materials, $15 for direct labor, and $10 for variable overhead. Fixed costs were $10,000 in manufacturing overhead and $50,000 in nonmanufacturing costs. a. What is the total contribution margin? b. What is the unit contribution margin? c. What is the contribution margin ratio? d. If sales increase by 5,000 units, by how much will profits increase?

Jason, Inc. sold 90,000 units last year for $2.50 each. Variable costs per unit were $0.30...

Jason, Inc. sold 90,000 units last year for $2.50 each. Variable costs per unit were $0.30 for direct materials, $0.50 for direct labor, and $0.30 for variable overhead. Fixed costs were $60,000 in manufacturing overhead and $40,000 in nonmanufacturing costs. a. What is the total contribution margin? b. What is the unit contribution margin? c. What is the contribution margin ratio? d. If sales increase by 15,000 units, by how much will profits increase?

Pearson Company sold 5,000 units for $50 each. Variable costs were $28 per unit and total fixed expenses were $20,350.

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Acme Company sold 500 units for $450 each. Variable costs were $275 per unit, and total...

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