Exercise 3-2 (Part Level Submission) Scott Confectionery sells its Stack-o-Choc
ID: 2332614 • Letter: E
Question
Exercise 3-2 (Part Level Submission) Scott Confectionery sells its Stack-o-Choc candy bar for $0.60. The variable cost per unit for the candy bar is $0.34; total fixed costs are $177,000 (a) Your answer is correct. What is the contribution margin per unit for the Stack-0-Choc candy bar? (Round per unit answer to 2 decimal places, e.g. 52.75.) .26 The contribution margin per unit $ LINK TO TEXT LINK TO VIDEO Attempts: 1 of 15 used (b) Your answer is correct. what is the contribution margin ratio for the Stack-o-choc candy bar? (Round ratio to 2 percentage places, eg. 0.38-3896.) 43 The contribution margin ratio LINK TO TEXT LINK TO VIDEO Attempts: 1 of 15 used (c) What is the breakeven point in units? In sales dollars? (Round answers to 0 decimal places, e.g. 5,275. Use your answer of breakeven units to calculate the breakeven point in dollars.) The breakeven point bars The breakeven sales LINK TO TEXT LINK TO VIDEOExplanation / Answer
Answer to Part a:
Contribution Margin per Unit = Selling Price per unit – Variable Cost per Unit
Contribution Margin per Unit = $0.60 - $0.34
Contribution Margin per Unit = $0.26
Answer to Part b:
Contribution Margin Ratio = Contribution Margin per Unit / Selling Price per Unit * 100
Contribution Margin Ratio = 0.26 / 0.60 * 100
Contribution Margin Ratio = 43.33%
Answer to Part c:
Break Even Point (in Bars) = Fixed Cost / Contribution Margin per Unit
Break Even Point (in Bars) = 177,000 / 0.26
Break Even Point (in Bars) = 680,769.23
or Break Even Point (in Bars) = 680,769 Bars
Break Even Sales = Break Even Point (in Bars) * Selling Price per Unit
Break Even Sales = 680,769 * $0.60
Break Even Sales = $408,461.40
or Break Even Sales = $408,461
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