Managerial Accounting Quiz 4 Summer 2018

Chapters 5 and 6 Name________________________

10 Points

Show all supporting computations.

1. Hurst Co. manufacturers and sells a single product. Price and cost data regarding this product are as follows:

1. What is Hursts Contribution Margin per unit? What is their Contribution Margin Ratio?

2. What is Hursts break-even point in Units and in Dollars?

3. How many units would Hurst Co. need to sell to make a target profit of $16,000? What would their sales dollars be at this level?

4.What is the margin of safety in units and dollars assuming a current sales level of 43,500 units?

Using the current sales level of 43,500, what is the operating leverage? Use the operating leverage to predict the increase in net income if sales increase by 20%. Prove the percentage increase predicted by preparing a contribution margin format income statement.

Selling price Variable manufacturing costs Variable selling and administrative expense. Fixed manufacturing overhea... Fixed selling and administrative expenses $40 per unit $20 per unit S6 per unit $208,000 per year $324,000 per year