Student Name> Section Number > CVP 6 Data Section Fixed Variable 7 8 Production
ID: 2552646 • Letter: S
Question
Student Name> Section Number > CVP 6 Data Section Fixed Variable 7 8 Production costs: 9 Direct materials 10 Direct labor 11 Factory overhead 12 Selling expenses 13 Sales salaries & commissions 14 Advertising 15 Miscellaneous selling expense 16 General expenses: 17 Office salaries 18 Supplies 19 Miscellaneous general expense 20 21 $2.30 4.70 3.00 $225,000 97,000 47,500 16,200 0.75 92,000 12,300 15,000 0.25 $505,000 $11.00 23 24 Selling price per unit 25 Expected unit sales 26 27 - 28 Answer Section: 29 30 Contribution margin per unit 31 Contribution margin ratio 32 Unit sales at break-even point 33 Dollar sales at break-even point 34 Expected net income 35 $16.00 120,000 FORMULA1 FORMULA2 FORMULA3 FORMULA4 FORMULA5Explanation / Answer
a) Contribution margin per unit = 16-11 = 5 per unit
b) Contribution margin ratio = 5*100/16 = 31.25%
c) Units sales at break even point = 505000/5 = 101000 unit
d) Dollar sales at break even point = 101000*16 = 1616000
e) Expected net income = (120000*5-505000)= 95000