Question
Sales price per unit: (current monthly sales volume is 120,000 units) . . . . $ 25.00 Variable costs per unit: Direct materials . .
Requirement 1. What is the? company's contribution margin per? unit? Contribution margin? percentage? Total contribution? margin?
Begin by identifying the formula.
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| = | Contribution margin per unit |
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The contribution margin per unit is
?$nothing.
What is the? company's contribution margin? percentage?
Begin by identifying the formula.
| ( |
| / |
| ) = | Contribution margin percentage | |
?(Round your answer to the nearest whole? percent.)
The contribution margin percentage is
nothing?%.
What is the? company's total contribution? margin?
Begin by identifying the formula.
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|
| = | Contribution margin |
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The total contribution margin is
?$nothing.
Requirement 2. What would the? company's monthly operating income be if the company sold
150 comma 000150,000
?units?
Use the following table to compute the operating income if
150 comma 000150,000
units are sold.
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| $7.10 | |
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| Less: |
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Requirement 3. What would the? company's monthly operating income be if the company had sales of
$ 4 comma 500 comma 000$4,500,000??
Use the following table to compute the operating income with sales totaling
$ 4 comma 500 comma 000$4,500,000.
?(Enter the contribution margin ratio to the nearest whole? percent.)
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| % | |
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| Less: |
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Requirement 4. What is the breakeven point in? units? In sales? dollars?
Begin by identifying the formula.
| ( |
| + |
| ) / |
| = | Breakeven sales in units | |
?(Round the breakeven point in units up to the nearest whole? unit.)
The? company's breakeven point is
nothing
units.
What is the breakeven point in sales? dollars?
Begin by identifying the formula.
| ( |
| + |
| ) / |
| = | Breakeven sales in dollars | |
?(Round the breakeven point in sales dollars up to the nearest whole? dollar.)
The breakeven point in dollars is
?$nothing.
Requirement 5. How many units would the company have to sell to earn a target monthly profit of
$ 260 comma 400$260,400??
Begin by identifying the formula.
| ( |
| + |
| ) / |
| = | Target sales in units |
|
?(Round your answer up to the nearest whole? unit.)
In order to earn a monthly profit of
$ 260 comma 400$260,400?,
the company must sell
nothing
units.
Requirement 6. Management is currently in contract negotiations with the labor union. If the negotiations? fail, direct labor costs will increase by
99?%,
and fixed costs will increase by
$ 24 comma 400$24,400
per month. If these costs? increase, how many units will the company have to sell each month to break? even? ?(Round your answer up to the nearest whole? number.)
The new breakeven point is
nothing
units.??
Requirement 7. Return to the original data for this question and the rest of the questions. What is the? company's current operating leverage factor? (round to two? decimals)?
Begin by identifying the formula.
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| / |
| = | Operating leverage factor |
|
?(Round your answer to two decimal? places.)
The operating leverage factor is
nothing.
Requirement 8. If sales volume increases by
66?%,
by what percentage will operating income? increase? ?(Round the percentage to one decimal? place.)
The operating income will increase by
nothing?%.
Requirement 9. What is the? company's current margin of safety in sales? dollars? What is its margin of safety as a percentage of? sales?
Begin by identifying the formula.
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| - |
| = | Margin of safety in dollars |
|
The current margin of safety is
?$nothing.
What is its margin of safety as a percentage of? sales?
Begin by identifying the formula.
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| / |
| = | Margin of safety percentage |
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|
?(Round the percentage to the nearest whole? percent.)
The margin of safety as a percentage of sales is
nothing?%.
Requirement 10. Say the company adds a second line of flash drives? (32 GB in addition to 16? GB). A unit of the 32 GB flash drives will sell for
$ 50$50
and have variable cost per unit of
$ 28$28
per unit. The expected sales mix is
fourfour
of the small flash drives? (16 GB) for every one large flash drive? (32 GB). Given this sales? mix, how many of each type of flash drive will the company need to sell to reach its target monthly profit of
$ 260 comma 400$260,400??
Is this volume higher or lower than previously needed? (in Question? 5) to achieve the same target? profit? Why?
Begin by computing the? weighted-average contribution margin per unit. ?(Round all amounts to the nearest? cent, $X.XX.)
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| 16 GB | 32 GB | Total |
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| Less: |
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| Weighted average contribution margin per unit |
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Given this sales? mix, how many of each type of flash drive will the company need to sell to reach its target monthly profit of
$ 260 comma 400$260,400??
?(Round new target sales in units up to the next whole unit. Round units of the smaller drives and larger units to the nearest whole? unit.)
The new target sales in units is
nothing.
The company will need to sell
nothing
units of the smaller drives and
nothing
units of the larger units.
Is this volume higher or lower than previously needed? (in Question? 5) to achieve the same target? profit? Why?
The target sales is
?
higher than
lower than
the same as
before because now the company is selling a product with
?
a much higher
a much lower
the same
unit contribution margin.
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A Practical Guide To UK Accounting And Auditing Standards
Authors: Steve Collings
1st Edition
152650331X, 9781526503312
