Last month, Willsted Company sold 460 units for $26.00 each. During the month, f
ID: 2388680 • Letter: L
Question
Last month, Willsted Company sold 460 units for $26.00 each. During the month, fixed costs were $2,510 and variable costs were $7.30 per unit.1: Determine the unit contribution margin and contribution margin ratio. (Round your intermediate calculations and final answer to 2 decimal places.Omit the "$" & "%" signs in your response.)
Unit contribution margin:_______
Contribution margin ratio:_______ %
2: Calculate the break-even point in units and sales dollars. (Round your intermediate calculations and break even sales dollars to 2 decimal places.Omit the "$" sign in your response.)
Break-even units:_______ units
Break-even sales dollars:$_______
3: Compute Willsted
Explanation / Answer
total cost = 2,510 + 7.30*460 = 5868
total revenue =26*460 =11960
1)Unit contribution margin: 26-7.30 = 18.7
Contribution margin ratio: 18.7/26 = .72
2) 2,510 + 7.30x = 26x
=>18.7x=2510 =>x=134.22 = 135(approx)
brk even sales in dollars is = 26*134.22 =3 489.72 (or 26*135 =3510)
3)Margin of safety: 460-135 = 325 units
Percentage of sales: ((11960-3510)/11960)*100= (0.706521)*100 = 70.6521%
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