Question
Company manufactures and sells a single product. The company's sales and expenses for last year follow: Total Per Unit % Sales. . . . .
Company manufactures and sells a single product. The company's sales and expenses for last year follow:
| Total | Per Unit | % |
---|---|---|---|
Sales. . . . . . . . . . . . . . . | $150,000 | $20 | ? |
Variable expenses. . . . . . . | ? | ? | ? |
Contribution margin. . . . | ? | ? | ? |
Fixed expenses. . . . . . . . | 12,000 | ||
Operating income. . . . . . . | $25,500 |
|
1. | Fill in the missing numbers in the table. Use the following questions to help fill in the missing numbers in the table: |
a. What is the total contribution margin? b. What is the total variable expense? c. How many units were sold? d. What is the per-unit variable expense? e. What is the per-unit contribution margin? | |
2. | Answer the following questions about breakeven analysis: |
a. What is the breakeven point in units? b. What is the breakeven point in sales dollars? | |
3. | Answer the following questions about target profit analysis and safety margin: |
a. How many units must the company sell in order to earn a profit of $45,000? b. What is the current margin of safety in units? c. What is the margin of safety in sales dollars? d. What is the margin of safety in percentage? |
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