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In: Accounting

A company sells clocks for $20 each. Its variable cost per unit is $14, and its...

A company sells clocks for $20 each. Its variable cost per unit is $14, and its fixed cost per year is $9,000.

1. If it sells 2,000 clocks this year, what is its contribution margin?

2. If it sells 2,000 clocks this year, what is its operating income?

3. If it sells 2,000 clocks this year, what is its operating leverage?

4. If it sells 2,000 clocks this year, what would be the percentage change in its operating income if it sells 5% more clocks next year?

5. What is the company’s contribution margin per unit?

6. What is the company’s contribution margin ratio?

7. How many units must the company sell to break even?

8. What amount of sales dollars is needed to breakeven?

9. How many units must the company sell to earn an operating income of $6,000?

10. What amount of sales dollars is needed to earn an operating income of $6,000?

11. If the company is currently selling 2,000 clocks, what is the margin of safety in units?

12. If the company is currently selling 2,000 clocks, what is the margin of safety in sales dollars?

13. If the company is currently selling 2,000 clocks, what is the margin of safety percentage?

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ekkarill92 answered 1 year ago
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