Question
In: Accounting
Question 6: The following company provides a single product and have provided their summary forecast data...
Question 6: The following company provides a single product and have provided their summary forecast data shown below relating to its product for 2020.
|
Selling price per unit |
$55 |
|
Variable manufacturing costs |
$23 |
|
Annual fixed manufacturing costs |
$450000 |
|
Variable, marketing, distribution and administration costs |
$9 |
|
Annual fixed non-manufacturing costs |
$229000 |
|
Annual volume |
50000 |
a. Calculate the contribution margin per unit.
b. Calculate the contribution margin ratio.
c. Calculate the break-even in units and sales dollars for 2020.
d.Calculate the profit earned in 2020.
Solutions
Expert Solution
| a. Calculate the contribution margin per unit. | 23 | |
| b. Calculate the contribution margin ratio. | 41.82% | (23/55*100) |
| c. Calculate the break-even in units | 29,522 | UNITS |
| c. and sales dollars for 2020. | 1,623,696 | |
| d.Calculate the profit earned in 2020. | 471,000 | |
| Working note: | ||
| Total | Per Unit | |
| Sales | 2,750,000 | 55 |
| Less: Variable cost-manufacturing | 1,150,000 | 23 |
| Less: Variable cost-marketing, distribution | 450,000 | 9 |
| Contribution margin | 1,150,000 | 23 |
| Less: fixed cost | 679,000 | |
| Net Income | 471,000 | |
| Break even units = Total fixed cost / Contribution margin per unit | ||
| Break even sales = Total fixed cost / Contribution margin ratio | ||
ekkarill92 answered 2 years agoRelated Solutions
Question 6: The following company provides a single product and have provided their summary forecast data...
Question 6: The following company provides a single
product and have provided their summary forecast data shown below
relating to its product for
2020.
Selling price per unit
$55
Variable manufacturing costs
$23
Annual fixed manufacturing costs
$450000
Variable, marketing, distribution and administration
costs
$9
Annual fixed non-manufacturing costs
$229000
Annual volume
50000
a. Calculate the contribution margin per
unit.
b. Calculate the contribution margin ratio.
c. Calculate the break-even in units and sales dollars
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Units in
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Units in ending
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Unit in ending inventory ...................................
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Direct labor
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