Felde Bucket Co., a manufacturer of rain barrels, had the following data for 201
ID: 2484365 • Letter: F
Question
Felde Bucket Co., a manufacturer of rain barrels, had the following data for 2016.
Fixed costs
Break-Even point $29016
Margin of Safety $72639
$17,700
Contribution Margion ratio: 61%
Margin of safety Ratio :71.46%
If the company wishes to increase its total dollar contribution margin by 30% in 2017, by how much will it need to increase its sales if selling price per unit, variable price per unit and total fixed costs remain constant?
Sales 2,260 units Sales price $44.98 per unit Variable costs $17.54 per unitFixed costs
Break-Even point $29016
Margin of Safety $72639
$17,700
Contribution Margion ratio: 61%
Margin of safety Ratio :71.46%
If the company wishes to increase its total dollar contribution margin by 30% in 2017, by how much will it need to increase its sales if selling price per unit, variable price per unit and total fixed costs remain constant?
Explanation / Answer
Statement showing computations Particulars Per Unit 2016 Sales 44.98 101,654.80 Variable Costs 17.54 39,640.40 Contribution = Sales- VC 27.44 62,014.40 CM Ratio= Cont/Sales*100 61.00% 61.00% Fixed Costs 17,700.00 Income = Contribution - Fixed Costs 44,314.40 Desired Contribution Margin = 62,014*1.30 80,618.72 Contribution per unit 27.44 No of units = 80,618.72/27.44 2,938.00 Increase in sales= 2938 - 2260 678.00 Increase in Sales in % = 678/2260 30.00%
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.