1. Kaiser\'s Kraft Korner sells a single product. 7,000 units were sold resultin
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Question
1. Kaiser's Kraft Korner sells a single product. 7,000 units were sold resulting in $70,000 of sales revenue, $28,000 of variable costs, and $12,000 of fixed costs.
solve:
A. Contribution margin per unit is:
B. Breakeven point in unit is:
C. The number of units that must be sold to achieve 60,000 of operating income
D. If sales increase by 25,000, operating income will increase by:
2. Schuppener Company sells its only product for $18 per unit, variable production costs are $6 per unit, and selling and administrative costs are $3 per unit. Fixed costs for 10,000 units are $10,000.
3. Fixed costs equal $12,000, unit contribution margin equals $20, and the number of units sold equal 1,600. Operating income is:
4. If selling price per unit is $30, variable costs per unit are $20, total fixed costs are $10,000, the tax rate is 30%, and the company sells 5,000 units, net income is:
5. At the breakeven point of 200 units, variable costs total $400 and fixed costs total $600. The 201st unit sold will contribute ______ to profits
Explanation / Answer
Contribution Margin per unit : [sales – variable cost]/Number of units sold
[$70,000- $28000]/ 7000 units
$6 per unit
B Breakeven point is
Fixed cost/ Contribution Margin per unit = 12000/$6 per unit= $2000 units
Net profit + Fixed asset = selling price per unit – Variable cost per unit
$60000+$12000 = 10X-4X
6X = $72000
X = 12000 units
$95000-$28000- $12000= $55000
Increase in operating income by $55000- $40000 = $15000
2 Contribution Margin will be
Selling price per unit -variable cost per unit – Selling and administrative cost per unit
$18-$6-$3 = $ 9 per unit
3
Operating income
Total contribution Margin = $20*1600 =$32000
Operating income = $32000- $12000 = $20,000
Net income = $40000 (1-0.30)= $28000
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