Using CVP relationships While Vivi Martin was out her secretary received a call from Mr. Johnson who
Question:
Using CVP relationships While Vivi Martin was out her secretary received a call from Mr. Johnson who said, "Ms. Martin wanted some figures from me before I leave for Washington. Please give her this information: We break even at 1,200 units and our fixed costs are $20,160. These are quarterly figures. Last quarter's return on sales was 7 percent. Our contribution margin is steady at 35 percent."
When Ms. Martin returned to her office she looked at the figures and said, "1 wanted a lot more. Why didn't he give me sales and profit for the quarter? Call Johnson back and get that information, and also find out variable cost per unit." When the secretary called back, Mr. Johnson was already gone, so he asks you to look at the figures and help him get the rest of the information.
Step by Step Answer: