Question
Stormy Camping Supply sells tents. The company has the following income statement. Sales ($1,000 per unit) $200,000 Less Cost of Goods sold ($475 per unit)
Stormy Camping Supply sells tents. The company has the following income statement.
Sales ($1,000 per unit) | $200,000 | |
Less Cost of Goods sold ($475 per unit) | 95,000 | |
Gross margin | 105,000 | |
Less Operating costs | ||
Salaries | $40,000 | |
Advertising | 10,000 | |
Sales commissions ($5 per unit) | 1,000 | |
Shipping ($20 per unit) | 4,000 | 55,000 |
Operating income | $ 50,000 |
Required:
a. What is the contribution margin per unit?
b. What is the contribution margin ratio?
c. What is the breakeven point in units? In sales dollars?
d. What is the margin of safety in units? In dollars?
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Modern Advanced Accounting In Canada
Authors: Murray Hilton
6th Edition
0070001537, 978-0070001534
