Price, Variable Cost per Unit, Contribution Margin, Contribution Margin Ratio, F

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. At the break-even point, Jefferson Company sells 95,000 units and has fixed cost of $346,500. The variable cost per unit is $0.1. What price does Jefferson charge per unit? Round to the nearest cent. Sooner Industries charges a price of $78 and has fixed cost of $437,000. Next year, Sooner expects to sell 11,200 units and make operating income of $188,000. What is the variable cost per unit? What is the contribution margin ratio? Round your answer to the nearest cent. Enter the contribution margin ratio as a percentage, rounded to two decimal places. Last year, Jasper Company earned operating income of $28,700 with a contribution margin ratio of 0.30. Actual revenue was $239,000. Calculate the total fixed cost. Round your answer to the nearest dollar. Laramie Company has variable cost ratio of 0.55. The fixed cost is $105,470 and 24,500 units are sold at breakeven. What is the price? What is the variable cost per unit? The contribution margin per unit? (Round answers to the nearest cent.)

Explanation / Answer

1. price Per Unit at Break Even = {Fixed cost + Break even Qty ( Variable Cost Per Unit)}/ Break Even Qty

= {346500+9500}/95000 = 3.75

2. Variable cost Per Unit = => 188000=11200(88)-437000-11200( Variable Cost P.U)

==> 32.19 is Variable cost

Contribution margin ratio = Contribution P.U/ Selling Price P.U = (88-32.19)/88.32 = 63.42%

3. Contribution margin = Contribution / Sales

==> 0.30= Contrbution/239000

==> Contribution = 71700

Operating Income = Contribution- Fixed cost

==> 28700 = 71700- fixed cost

==> Fixed cost = 43000

4. at Break Even Selling Price = Fixed cost/ Break even Qty

= 105470/24500= 4.30

Variable Cost = Variable Cost ratio * Selling Price P.U = 4.3 * 0.55 = 2.37

Contrbution Margin = Sales P.u- Variable cost P.U = 4.30-2.37 = 1.93

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