Exercise 4-13 Rhetorix, Inc., produces stereo speakers. The selling price per pair of speakers is $900. The variable cost of production is $300 and the fixed cost per month is $60,000.

Calculate the contribution margin associated with a pair of speakers.

Contribution margin

$

In August, the company sold 8 more pairs of speakers than planned. What is the expected effect on profit of selling the additional speakers? Profit will decreaseincrease by $.

Calculate the contribution margin ratio for Rhetorix associated with a pair of speakers. (Round answer to 2 decimal places, e.g. 15.25.)

Contribution margin ratio

In October, the company had sales that were $8,000 higher than planned. What is the expected effect on profit related to the additional sales?

Increase in profit

$