Question

In: Accounting

Penny Company sells 25,000 units at $59 per unit. Variable costs are $29 per unit, and...

Penny Company sells 25,000 units at $59 per unit. Variable costs are $29 per unit, and loss from operations is ($50,000). Determine the following: Round the contribution margin ratio to one decimal place.

a. Unit contribution margin	$	per unit
b. Contribution margin ratio		%
c. Fixed costs per unit at production of 25,000 units	$	per unit

Expert Solution

Ans. a. Unit contribution margin per unit = (Sales price per unit-Variable cost per unit)

= (59-29) = $30 per unit

b. Contribution margin ratio = Contribution/Sales X100

= 30/59X100 = 50.85%

c. Calculation of Fixed per unit

Total Contribution for 25000 units (25000X30) = 750000

Less: Fixed Cost (Difference) = 800000*

Operation Loss = (50000)

Total Fixed is = $800000

Fixed cost per unit at production of 25000 units = 800000/25000 = 32 per unit

*Fixed cost calculation

Operation loss is 50000, it will come after deducting Fixed cost from Total contribution

Total contribution for 25000 units is = 750000

Operation loss is = 50000

Total fixed cost = 800000

Means Fixed cost is more than contribution thats why Operation loss is coming,

plz like it

ekkarill92 answered 1 year ago

Variable and Absorption Costing Grant Company sells its product for $59 per unit. Variable manufacturing costs...

Variable and Absorption Costing Grant Company sells its product for $59 per unit. Variable manufacturing costs per unit are $36, and fixed manufacturing costs at the normal operating level of 18,000 units are $90,000. Variable selling expenses are $7 per unit sold. Fixed administrative expenses total $155,000. Grant had 7,000 units at a per-unit cost of $41 in beginning inventory in 2016. During 2016, the company produced 18,000 units and sold 20,000. Would net income for Grant Company in 2016...

2.) Harry Company sells 27,000 units at $34 per unit. Variable costs are $21.08 per unit,...

2.) Harry Company sells 27,000 units at $34 per unit. Variable costs are $21.08 per unit, and fixed costs are $160,500. Determine (a) the contribution margin ratio, (b) the unit contribution margin, and (c) income from operations. a. Contribution margin ratio (Enter as a whole number.) % b. Unit contribution margin (Round to the nearest cent.) $ per unit c. Income from operations $ 3.) Megan Company has fixed costs of $505,920. The unit selling price, variable cost per unit,...

Contribution Margin Molly Company sells 23,000 units at $46 per unit. Variable costs are $25.76 per...

Contribution Margin Molly Company sells 23,000 units at $46 per unit. Variable costs are $25.76 per unit, and fixed costs are $181,600. Determine (a) the contribution margin ratio, (b) the unit contribution margin, and (c) operating income. a. Contribution margin ratio (Enter as a whole number.) % b. Unit contribution margin (Round to the nearest cent.) $ per unit c. Operating income

Contribution Margin Harry Company sells 35,000 units at $26 per unit. Variable costs are $17.42 per...

Contribution Margin Harry Company sells 35,000 units at $26 per unit. Variable costs are $17.42 per unit, and fixed costs are $126,100. Determine (a) the contribution margin ratio, (b) the unit contribution margin, and (c) income from operations. a. Contribution margin ratio (Enter as a whole number.) % b. Unit contribution margin (Round to the nearest cent.) $ per unit c. Income from operations $

Contribution Margin Sally Company sells 37,000 units at $46 per unit. Variable costs are $26.68 per...

Contribution Margin Sally Company sells 37,000 units at $46 per unit. Variable costs are $26.68 per unit, and fixed costs are $321,700. Determine (a) the contribution margin ratio, (b) the unit contribution margin, and (c) income from operations. a. Contribution margin ratio (Enter as a whole number.) % b. Unit contribution margin (Round to the nearest cent.) $ per unit c. Income from operations $ Break-Even Point Radison Enterprises sells a product for $107 per unit. The variable cost is...

Our company sells a product for $150 per unit. Variable costs are $90 per unit and...

Our company sells a product for $150 per unit. Variable costs are $90 per unit and fixed costs are $18,000. The company expects to sell 800 units this year. How many units must we sell to break even? a) 300 b) 320 c) 360 d) 400 Our company has reviewed the utilities bills for our company. We have determined that the highest and lowest bills were $5,600 and $3,200 for the months of January and September. If we produced 1,200...

Plymouth Corp. sells units for $100 each. Variable costs are $75 per unit, and fixed costs...

Plymouth Corp. sells units for $100 each. Variable costs are $75 per unit, and fixed costs are $200,000. If Plymouth leases a new machine, fixed costs will increase by $60,000 a year, but production will be more efficient, saving $5 per unit. At what level of production will Plymouth be indifferent between leasing and not leasing the new machine?

Sells price per unit=$200 variable manufacturing costs per unit= $50 variable S&A costs per unit= $10...

Sells price per unit=$200 variable manufacturing costs per unit= $50 variable S&A costs per unit= $10 Fixed MOH= $50,000 Fixed S&A costs=$10,000 Units produced=5000 Units sold= 4000 Produce a full absorption income statement, what is the operating income produce a variable costing income statement, what is the operating income if units produced exceeds untis sold, does full absorption accounting or varible cost account result in a higher operating income

Given Sales in units 10,000 Variable manufacturing costs per unit 5 Variable administrative costs per unit...

Given Sales in units 10,000 Variable manufacturing costs per unit 5 Variable administrative costs per unit 2 Fixed manufacturing costs per unit 2 Fixed administrative costs per unit 1 Variable costs 75% of sales Selling price per unit? $2.22 $9.33 $17.50 $20 Given for XM Company the following data for January 20X1. Direct material purchased and used in production accounted for $ 50000 Units purchased 5000 The standard units 4200 Managers estimate price variance not to exceed +1% of the...

Company sells its product for $11700 per unit. Variable costs per unit are: manufacturing, $5500; and...

Company sells its product for $11700 per unit. Variable costs per unit are: manufacturing, $5500; and selling and administrative, $135. Fixed costs are: $30000 manufacturing overhead, and $40000 selling and administrative. There was no beginning inventory at 1/1/18. Production was 20 units per year in 2018–2020. Sales were 20 units in 2018, 16 units in 2019, and 24 units in 2020. Income under variable costing for 2019 is $27040. $33040. $35200. $60080.