Question 5 (1 point) X Company, a manufacturing company with no inventories, has

Question

Question 5 (1 point) X Company, a manufacturing company with no inventories, has the following information Sales Revenue Fixed Manufacturing Expenses Variable Manufacturing Expenses Fixed Selling & Administrative Expenses Variable Selling & Administrative Expenses $1,000,000 250,000 400,000 200,000 100,000 Compute net income on a contribution income statement Do not enter $ signs or commas. for example enter, $325,000 as 325000. Save Question 6 (1 point) X Company has provided the following information Price per unit Variable cost per unit Fixed costs per month Compute the unit contribution margin $10,000 Do not enter any commas or dollar signs. For example, enter $76 as 76

Explanation / Answer

5.

6.

Unit contribution margin = Selling price per unit - Variable cost per unit

= 40 - 12

= 28

7.

Contribution margin ratio = (selling price per unit- variable cost per unit) / selling price per unit

= (40 - 12) / 40

= 70%

8.

Break-even point in sales dollars = Fixed costs / Contribution margin ratio

= 10,000 / 0.2

= 50,000

9.

Contribution margin per unit = Selling price per unit - Variable cost per unit

= 80 - 20

= 60

Break-even point in units = Fixed costs / Contribution margin per unit

= 30,000 / 60

= 500 units  

Sales revenue 1,000,000 Variable costs : Variable manufacturing expenses 400,000 Variable selling and administrative expenses 100,000 Contribution margin 500,000 Fixed costs : Fixed manufacturing expenses 250,000 Fixed selling and adminstrative expenses 200,000 Net income 50,000

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