Answered step by step
Verified Expert Solution
Question
1 Approved Answer
With fixed costs of $10,000/month and variable costs of $2/unit, Blake reported a monthly profit of $6,000 at a volume of 8,000 units. The unit
With fixed costs of $10,000/month and variable costs of $2/unit, Blake reported a monthly profit of $6,000 at a volume of 8,000 units. The unit selling price was: Formulas 1. Cost per equivalent unit = Costs for the Period / Equivalent Units of Production for the period 2. Conversion costs = Direct Labor + Manufacturing Overhead 3. Units completed/transferred out + Equivalent units of ending work in process: Equivalent units of production 4. Predetermined Overhead rate Estimated Overheads / Estimated Allocation Base (Activity Level) 5. Applied Overhead = Predetermined Overhead Rate x Actual Allocation Base (Activity level) 6. Profit = (Price x Quantity) - (Variable Costs + Fixed Costs) 7. Unit contribution margin = Unit Selling Price - Unit Variable Cost 8. Contribution Margin Ratio = Unit Contribution Margin / Unit Selling Price 9. Break-even point (units) = Fixed Costs / Unit Contribution Margin 10. Break-even point (dollars) = Fixed Costs/CM Ratio 11. Margin of safety - Total sales - Break-even sales $2.00 $1.75 $3.75 $4.00
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