Contribution Margin Sally Company sells 39,000 units at $20 per unit. Variable costs are $14.20 per unit, and foxed costs are $90,500. 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.) c. Operating income Break-Even Point Radison Inc. selis a product for $87 per unit. The variable cost is $44 per unit, while fixed costs are $621,264. Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $92 per unit. a. Break-even point in sales units units b. Break-even point if the selling price were increased to $92 per unit units 1. Determine the total variable costs and the total fixed costs for the curfent vear. 2. Determine (a) the unit variable cost and (b) the unit contributian margin for the current year. Unit variable cost Unit contribution margin 3. Compute the break-even sales (units) for the current year. units 4. Compute the break-even sales (units) under the proposed program for the foliowing year. units 5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $58,500,000 of operabing income that was carned in the current year. units 6. Determine the maximum operating income possible with the expanded plant. $ 7. If the proposal is occepted and sales remain at the current level, what will the operating income or loss be for the following vear? 8. Based on the data given, would you recommend accepting the proposal? a. In favor of the proposal because of the reduction in break-even point. b. In favor of the proposal because of the possibility of increasing income from operations. c. In favor of the proposal because of the increase in break-even point. d. Reject the proposal because if future sales remain at the current level, the income from operations wial increase. e. Reject the proposal because the sales necessary to maintain the current income from operations would be beiow the current year saies. Classify Costs Following is a list of various costs incurred in producing replacement automobile parts. With respect to the production and sole of these auto parts, chassi? each cost as either variable costs, fixed costs, or mixed costs. 1. Oil used in manufacturing equipment 2. Plastic 3. Property taxes, $165,000 per year on factory building and equipment 4. Salary of plant manager 5. Cost of labor for hourly workers 6. Packaging 7. Factory cleaning costs, $6,000 per month 8. Metal 9. Rent on warehouse, $10,000 per month plus $25 per square foot of storage used 10. Property insurance premiums, $3,600 per month plus $0,01 for each dollar of property over $1,200,000 11. Straight-line depreciation on the production equipment 12. Hourly wages of machine operators 13. Electricity costs, $0.20 per kilowatt-hour 14. Computer chip (purchased from a vendor) 15. Pension cost, $1.00 per employee hour on the job Break-Even Sales Under Present and Proposed Conditions Portmann Company, operating at full capacity, sold 1,000,000 units at a price of $189 per unit during the current year. Its income statement is as follows: The division of costs between variable and fixed is as follows: Management is considering a plant expansion program for the following year that will permit an increase of $13,230,000 in yearly sales. The expansien will increase fixed costs by $5,000,000 but will not affect the relationship between sales and variable costs. Required: 1. Determine the total variable costs and the total fixed costs for the current year
