I have to be able to show my calculations in Excel. Thanks in Advance. Ann Page
ID: 2655615 • Letter: I
Question
I have to be able to show my calculations in Excel. Thanks in Advance.
Ann Page Co. … fixed costs $30,000 per year. Variable costs per unit are $17. Sales price per unit is $30.
a)
What is the contribution margin of the product?
b)
Calculate the breakeven point in unit sales and dollars.
c)
What is the operating profit (loss) at:
i) 1,500 units per year?
ii) 3,600 units per year?
d)
Plot a breakeven chart using the foregoing figures.
Ann Page Co. … fixed costs $30,000 per year. Variable costs per unit are $17. Sales price per unit is $30.
a)
What is the contribution margin of the product?
b)
Calculate the breakeven point in unit sales and dollars.
c)
What is the operating profit (loss) at:
i) 1,500 units per year?
ii) 3,600 units per year?
d)
Plot a breakeven chart using the foregoing figures.
Explanation / Answer
a) contribution margin of the product = sales per unit- variable cost per unit
= 30- 17= $13 per unit
b) Break even points in units= fixed expenses/ contribution margin
= 30000/ 13 = 2307.69 units= 2308 units (approx)
Break even points in dollars= 2308 * 30= $69,240
c) computation of operating profit-
1500 units 3600 units sales 45,000 (1500*30) 108,000 (3600*30) variable cost 25,500 (1500*17) 61,200 (3600*17) contribution margin 19,500 46,800 fixed cost 30,000 30,000 operating profit/(loss) (10,500) 16,800