Question
Use the following info to answer A through E. Company A sells 10,000 units for a sales price of $50 each. The variable cost equals
Use the following info to answer A through E.
Company A sells 10,000 units for a sales price of $50 each. The variable cost equals $20 per unit. The total fixed cost equals $240,000.
A) What is the Contribution Margin for Company A in Total Dollars?; Per Unit?; and as a Percentage of Sales?
B) What is the breakeven in units and dollars?
C) What is the Margin of Safety in dollars?
D) Assuming a 4% decrease in Sales, what is the Degree of Operating Leverage?; Percentage change in Net Income?
E) Assuming a 4% decrease in sales, what will net income equal if the decrease in sales occurs?
F) Assuming management wants to achieve a Target Profit of $66,000. What would breakeven equal in units?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started