Bell Company sells several products. Information of average revenue and costs is as follows: Selling price per unit $33.00 Vanable costs per unit. Direct material $6.00 Direct manufacturing labor $1.50 $0.25 Manufacturing overhead Selling costs $200 Annual fixed costs $111,000 The company sells 12,000 units. The contribution margin per unit is $23.25 $25.50 $14.00 $25.25

Bell Company sells several products. Information of average revenue and costs is as follows: Selling price per unit $33.00 Vanable costs per unit. Direct material $6.00 Direct manufacturing labor $1.50 $0.25 Manufacturing overhead Selling costs $200 Annual fixed costs $111,000 The company sells 12,000 units. The contribution margin per unit is $23.25 $25.50 $14.00 $25.25

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 4BE

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A company sells mulch by the cubic yard. Grade A much sells for $150 per cubic yard and has variable costs of $65 per cubic yard. The company has fixed expenses of $15,000 per month. In August, the company sold 240 cubic yards of Grade A mulch. A. Calculate the contribution margin per unit for Grade A mulch. B. Calculate the contribution margin ratio of the Grade A mulch. C. Prepare a contribution margin income statement for the month of August.
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Good afternoon Please answer d i,ii Scent Fragrance Company manufactures and sells several ranges of perfumes. The Average revenue and cost of sales are as follows: Selling price per unit $20.00 Variable costs per unit: Direct materials $4.00 Direct manufacturing labor $1.60 Manufacturing overhead $0.40 Selling costs $2.00 Annual fixed costs $96,000 a) Calculate the contribution margin per unit. b) Calculate the number of units Scent Fragrance Company must sell each year to break even. c) Calculate the number of units Scent Fragrance Company must sell to yield a profit of$144,000. d) Managers may use Sensitivity analysis in their accounting system. i) What is sensitivity analysis? ii) How is Sensitivity analysis useful to managers?
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Q. No. 01 The Safeer Company manufactures and sells a single product. Price and cost data on product and operations are Selling price per unit Variable cost per unit Rs.25.00 Annual fixed costs Manufacturing overhead Selling and administrative Rs.192,000 276,000 Direct materials Rs.11.00 Direct labor 5.00 Manufacturing overhead Selling expenses Forecasted annual sales volume Rs.3,000,000 2.50 1.30 REQUIRED: 1. Safeer's breakeven point in units. 2. How many units Safeer must sell to earn Rs.156,000 of operating income. 3. Safeer estimates that its direct labor costs will increase by 8% next year. How many units must Safeer sell next year to reach the breakeven point? 4. If Safeer's direct labor cost increase by 8%, what must the selling price per unit of product be to maintain the same contribution margin ratio? 5. Calculate breakeven point in units, If Safeer's direct labor cost increase by 8% and manufacturing fixed cost to Rs.150,000.
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