Price, Variable Cost per Unit, Contribution Margin, Contribution Margin Ratio, F
ID: 2399075 • Letter: P
Question
Price, Variable Cost per Unit, Contribution Margin, Contribution Margin Ratio, Fixed Expense For each of the following independent situations, calculate the amount(s) required 1. At the break-even point, Jefferson Company sells 105,000 units and has fixed cost of $350,000. The variable cost per unit is $0.20. What price does Jefferson charge per unit? Note Round to the nearest cent. 2. Sooner Industries charges a price of $115 and has fixed cost of $430,500. Next year, Sooner expects to sell 15,500 units and make operating income of $198,000. What is the variable cost per unit? What is the contribution margin ratio? Note: Round your variable cost per unit answer to the nearest cent. Enter the contribution margin ratio as a percentage, rounded to two decimal places Variable cost per unit Contribution margin ratio 3. Last year, Jasper Company earned operating income o $13,920 with a contribution mar n ratio of 0.15 Actual revenue as S23?00. Calculate the tota fixed cost Note: Round your answer to the nearest dollar, if required. 4. Laramie Company has variable cost ratio of 0.40. The fixed cost is $109,410 and 21,300 units are sold at break-even. What is the price? What is the variable cost per unit? The contribution margin per unit? Note: Round answers to the nearest cent. Variable cost per unit Contribution margin per unitExplanation / Answer
1
Breakeven sales
105000 units
fixed cost
$ 350,000.00
Variable Cost
$ 21,000.00
Total sales value is Fixed cost plus variable cost plus profit
Fixed cost
$ 350,000.00
Variable Cost
$ 21,000.00
Profit
$ -
$ 371,000.00
Unit sales Price (sales value/units sold)
3.53
2
Profit at 15500 units
$ 198,000.00
Sales at 15500 units
$ 1,782,500.00
Less: Fixed Cost
$ 430,500.00
Less: Profit
$ 198,000.00
Variable Cost (sales-Fixed cost-Profit)
$ 1,154,000.00
Variable Cost per Unit (1154000/15500)
$ 74.45
Contribution Margin (1782500-1154000)
$ 628,500.00
Contribution margin ratio ((628500/1782500)*100)
35.26%
3
Revenue
$ 232,000.00
Less: Variable cost (revenue*85%)
$ 197,200.00
Contribution (15%)
$ 34,800.00
Less: Operating Income
$ 13,920.00
Fixed Cost (34800-13920)
$ 20,880.00
4
Variable cost
40% of sales
Fixed cost is 60% at Breakeven
$ 109,410.00
Variable cost at breakeven (109410/60%*40%)
$ 72,940.00
Variable cost per Unit (72940/21300)
$ 3.42
Contribution per unit (109410/21300)
$ 5.14
Price is total cost at breakeven/breakeven units
((109410+72940)/21300)
Sale Price
$ 8.56
1
Breakeven sales
105000 units
fixed cost
$ 350,000.00
Variable Cost
$ 21,000.00
Total sales value is Fixed cost plus variable cost plus profit
Fixed cost
$ 350,000.00
Variable Cost
$ 21,000.00
Profit
$ -
$ 371,000.00
Unit sales Price (sales value/units sold)
3.53
2
Profit at 15500 units
$ 198,000.00
Sales at 15500 units
$ 1,782,500.00
Less: Fixed Cost
$ 430,500.00
Less: Profit
$ 198,000.00
Variable Cost (sales-Fixed cost-Profit)
$ 1,154,000.00
Variable Cost per Unit (1154000/15500)
$ 74.45
Contribution Margin (1782500-1154000)
$ 628,500.00
Contribution margin ratio ((628500/1782500)*100)
35.26%
3
Revenue
$ 232,000.00
Less: Variable cost (revenue*85%)
$ 197,200.00
Contribution (15%)
$ 34,800.00
Less: Operating Income
$ 13,920.00
Fixed Cost (34800-13920)
$ 20,880.00
4
Variable cost
40% of sales
Fixed cost is 60% at Breakeven
$ 109,410.00
Variable cost at breakeven (109410/60%*40%)
$ 72,940.00
Variable cost per Unit (72940/21300)
$ 3.42
Contribution per unit (109410/21300)
$ 5.14
Price is total cost at breakeven/breakeven units
((109410+72940)/21300)
Sale Price
$ 8.56
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