Question
Chapman Products produces a unique item with the following information: Sale price $125 per unit Variable costs $50 per unit Fixed costs $70,000 Units produced
Chapman Products produces a unique item with the following information:
| Sale price | $125 per unit |
| Variable costs | $50 per unit |
| Fixed costs | $70,000 |
| Units produced and sold | 6,000 |
Required: Calculate the following based on the above information:
A. Operating margin
B. Contribution margin per unit
C. Contribution margin ratio%
D. If Chapman sells 500 more units, by how much will net operating income increase?
If Chapman has an additional $25,000 in sales, by how much will net operating income increase?
Step by Step Solution
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Step: 1
A Operating margin Operating margin is calculated by subtracting the total variable costs and fixed costs from the total sales revenue and then dividi...
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Cost Accounting A Managerial Emphasis
Authors: Horngren, Srikant Datar, George Foster, Madhav Rajan, Christ
6th Canadian edition
978-0132893534, 9780133389401, 132893533, 133389405, 978-0133392883
