Homework Help is Here – Start Your Trial Now!
Business
Accounting
A company sold 11,500 units last year for $21 each. Variable costs per unit were $2.00 for direct materials, $2.00 for direct labor, and $3.20 for variable overhead. Fixed costs were $61,600 in manufacturing overhead and $42,000 in nonmanufacturing costs. Required: a. What is the total contribution margin? Note: Round your intermediate calculations to 2 decimal places. b. What is the unit contribution margin? Note: Round your answer to 2 decimal places. c. What is the contribution margin ratio? Note: Round your intermediate calculations and final answer to 2 decimal places. d. If sales increase by 2,120 units, by how much will profits increase? Note: Round your intermediate calculation to 2 decimal places and final answer to the nearest dollar amount. a. Total Contribution Margin b. Unit Contribution Margin c. Contribution Margin Ratio d. Profits Increase

A company sold 11,500 units last year for $21 each. Variable costs per unit were $2.00 for direct materials, $2.00 for direct labor, and $3.20 for variable overhead. Fixed costs were $61,600 in manufacturing overhead and $42,000 in nonmanufacturing costs. Required: a. What is the total contribution margin? Note: Round your intermediate calculations to 2 decimal places. b. What is the unit contribution margin? Note: Round your answer to 2 decimal places. c. What is the contribution margin ratio? Note: Round your intermediate calculations and final answer to 2 decimal places. d. If sales increase by 2,120 units, by how much will profits increase? Note: Round your intermediate calculation to 2 decimal places and final answer to the nearest dollar amount. a. Total Contribution Margin b. Unit Contribution Margin c. Contribution Margin Ratio d. Profits Increase

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
100%
Need all answered
### Contribution Margin Analysis A company sold 11,500 units last year for $21 each. The variable costs per unit were $2.00 for direct materials, $2.00 for direct labor, and $3.20 for variable overhead. Fixed costs were $61,600 in manufacturing overhead and $42,000 in nonmanufacturing costs. #### Required Calculations: a. **Total Contribution Margin** - **Note:** Round your intermediate calculations to 2 decimal places. b. **Unit Contribution Margin** - **Note:** Round your answer to 2 decimal places. c. **Contribution Margin Ratio** - **Note:** Round your intermediate calculations and final answer to 2 decimal places. d. **Profit Increase with Sales Increase** - If sales increase by 2,120 units, by how much will profits increase? - **Note:** Round your intermediate calculation to 2 decimal places and final answer to the nearest dollar amount. #### Table for Answers: - **a. Total Contribution Margin:** - **b. Unit Contribution Margin:** - **c. Contribution Margin Ratio:** - **d. Profits Increase:** Use this structured approach to calculate and analyze the financial metrics concerning the company’s sales and costs.
Transcribed Image Text:### Contribution Margin Analysis A company sold 11,500 units last year for $21 each. The variable costs per unit were $2.00 for direct materials, $2.00 for direct labor, and $3.20 for variable overhead. Fixed costs were $61,600 in manufacturing overhead and $42,000 in nonmanufacturing costs. #### Required Calculations: a. **Total Contribution Margin** - **Note:** Round your intermediate calculations to 2 decimal places. b. **Unit Contribution Margin** - **Note:** Round your answer to 2 decimal places. c. **Contribution Margin Ratio** - **Note:** Round your intermediate calculations and final answer to 2 decimal places. d. **Profit Increase with Sales Increase** - If sales increase by 2,120 units, by how much will profits increase? - **Note:** Round your intermediate calculation to 2 decimal places and final answer to the nearest dollar amount. #### Table for Answers: - **a. Total Contribution Margin:** - **b. Unit Contribution Margin:** - **c. Contribution Margin Ratio:** - **d. Profits Increase:** Use this structured approach to calculate and analyze the financial metrics concerning the company’s sales and costs.
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS