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product X product Y total Revenue $50,000 W $80,000 $130,000 Variable costs: Direct labor $20,000 $30,000 $50.000 Direct materials $30,000 $20,000 $50,000 Contribution margin 12
product X product Y total Revenue $50,000 W $80,000 $130,000 Variable costs: Direct labor $20,000 $30,000 $50.000 Direct materials $30,000 $20,000 $50,000 Contribution margin 12 ? $30,000 Fixed costs ? $25.000 Profit margin 2 ? $5.000 The company allocates fixed costs based on direct labor dollars. Compute the profit margin for product line X. $10.000 O ($10,000) O $0 O $50.000 0 ($25.000) Fixed costs are $2 per unit (at current sales volume), variable costs are $4 per unit, and price is $5 per unit. How much will the profit change in the short term if sales volume is increased by 10 units? (the new volume is in the relevant range) o not enough information O increase by $50 o increase by $30 O increase by $10 O decrease by $10
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