provide correct answer of this General accounting question A company manufactures water bottles with a sellingprice of $25 per unit and variable costs of $15 per unit.For a production run of 3,500 units, what is thecontribution margin and contribution margin perunit?a) $35,000; $10b) $52,500; $15c) $87,500; $25d) $35,000; $15

Step 1: DefinitionThe contribution margin (CM) represents the revenue remaining after deducting…

Answered: A company manufactures water bottles…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 20E

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Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and trim kits. Fixed cost equals 146,000. Each door handle sells for 12 and has variable cost of 9; each trim kit sells for 8 and has variable cost of 5. Required: 1. What are the contribution margin per unit and the contribution margin ratio for door handles and for trim kits? 2. If Polaris sells 20,000 door handles and 40,000 trim kits, what is the operating income? 3. How many door handles and how many trim kits must be sold for Polaris to break even? 4. CONCEPTUAL CONNECTION Assume that Polaris has the opportunity to rearrange its plant to produce only trim kits. If this is done, fixed costs will decrease by 35,000, and 70,000 trim kits can be produced and sold. Is this a good idea? Explain.
The Mariachi Company prepared the following contribution format income statement based on a sales volume of 1,200 units (the relevant range of production is 500 units to 2,000 units): Sales 26,400 Variable expenses 18,000 Contribution margin 8,400 Fixed expenses 6,200 Net operating income 2,200 If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income?
Johnson Plumbing's fixed costs are $700,000 and the unit contribution margin is $17. What amount of units (rounded to a whole number) must be sold in order to realize an operating income of $100,000? a.58,882 b. 5,000 c.47,059 d.41,176
At its $25 selling price, Paciolli Company has sales of $10,000, variable manufacturing costs of $4,000, fixed manufacturing costs of $1,000, variable selling and administrative costs of $2,000 and fixed selling and administrative costs of $1,000. What is the company's contribution margin per unit? A) $15B) $10C) $0.60D) $0.40
Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales Variable expenses Contribution margin Fixed expenses Net operating income $ 90,000 49,500 40,500 33,210 $ 7,290 4 6. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income? Note: Round "Per Unit" calculations to ? decimal places
Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales $ 20,000 Variable expenses 13,000 Contribution margin 7,000 Fixed expenses 3,780 Net operating income $ 3,220 6. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income? Net Operating Income_____
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Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales $ 20,000 Variable expenses 12,000 Contribution margin 8,000 Fixed expenses 6,000 Net operating income $ 2,000 11. What is the margin of safety in dollars? What is the margin of safety percentage?
The following information applies to the questions displayed below.] Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales $ 60,000 Variable expenses 39,000 Contribution margin 21,000 Fixed expenses 14,700 Net operating income $ 6,300 10. How many units must be sold to achieve a target profit of $12,600? 11. What is the margin of safety in dollars? What is the margin of safety percentage? 12. What is the degree of operating leverage? (Round your answer to 2 decimal places.)
The records of Valium Company show a contribution margin ratio of 25%. The company desires to earn a profit of $15,000 and has fixed costs of $25,000. Determine the sales revenue that would have to be generated in order to earn the desired profit $106,250 O $240,000 O $160,000 O $340,000 O None O
Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales Variable expenses Contribution margin Fixed expenses $15,000 9,000 6,000 3,120 $ 2,880 Net operating income Required: 1. What is the contribution margin per unit? (Round your answer to 2 decimal places.) Contribution margin per unit
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A company manufactures water bottles with a selling price of $25 per unit and variable costs of $15 per unit. For a production run of 3,500 units, what is the contribution margin and contribution margin per unit? a) $35,000; $10 b) $52,500; $15 c) $87,500; $25 d) $35,000; $15