1. Schuppener Company sells its only product for $18 per unit, variable producti

Question

1. 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.

2. Fixed costs equal $12,000, unit contribution margin equals $20, and the number of units sold equal 1,600. Operating income is:

3. 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:

4. 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

Question 1 does not specify the requirement so I am solving the other 3 questions. 2)Calculation of operating income: Particulars Amount($) Contri bution(1600*20) 32000 Less: Fixed Cost 12000 Operating Income(32000-12000) 20000 Operating income is $20000 3)Calculation of net income: Particulars Amount($) Sales (5000*30) 150000 Less: Variable cost(5000*20) 100000 Contri bution(150000-100000) 50000 Less: Fixed Cost 10000 Operating Income(50000-10000) 40000 Less: Tax (40000*0.3) 12000 Net income(40000-12000) 28000 Net income is $28000 4) Break even point= fixed cost/ contributon per unit 200=600/contribution per unit contribution per unit=$3 201st unit will contribute $3

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