Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I figure out a and b need help with the rest Calculate the unit variable cost and unit contribution margin. Variable cost= direct material direct

image text in transcribed

I figure out a and b need help with the rest

  1. Calculate the unit variable cost and unit contribution margin.

Variable cost= direct material direct labor + variable overhead+ variable selling expenses

3.90+1.40+2.10+1.60= 8.40

Contribution overhead

Selling price- variable cost

20-8.40= 11.6

  1. Calculate the variable cost ratio and contribution margin ratio.

Total fixed cost = total fixed overhead total fixed selling & administrative expenses

52,000+38,530=90530

1. A company sells a single product for $20 per unit. Unit costs are as follows: Direct materials Direct labor Variable factory overhead Variable selling & administrative expenses $ 3.90 1.40 2.10 1.60 Total fixed factory overhead is $52,000 per year and total fixed selling and administrative expense is $38,530. a) Calculate the unit variable cost and unit contribution margin. b) Calculate the variable cost ratio and contribution margin ratio. c) Compute the break-even point in units. d) Compute the break-even point in dollars. e) Construct a CVP graph to demonstrate the above information. f) Construct a contribution margin income statement at the break-even point to prove your computations. g) NOW assume that the company would like to earn a target profit of $5,500. Now how many units must be sold? What would the required sales be in dollars? h) Using the CVP graph from above, add a point to represent the $5,500 profit. i) Using the contribution margin income statement above, add a column to represent $5,500 in target profit

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial & Managerial Accounting For Undergraduates

Authors: Jason Wallace, James Nelson, Karen Christensen, Theodore Hobson, Scott L. Matthews

2nd Edition

161853310X, 9781618533104

More Books

Students also viewed these Accounting questions

Question

licensure as a psychologist in the respective jurisdiction; and

Answered: 1 week ago

Question

How would you describe Mark Zuckerberg as a team leader?

Answered: 1 week ago