Cost-Volume-Profit Relations: Missing DataFollowing are data from 4 separate companies. Supply the missing data in each independent case. Case ACase BCase CCase DUnit Sales1,000800AnswerAnswerSales revenue$20,000AnswerAnswer$60000Variable cost per unit$10$1$12AnswerContribution marginAnswer$800AnswerAnswerFixed Costs$7,000Answer$80,000AnswerNet incomeAnswer$500AnswerAnswerUnit contribution marginAnswerAnswerAnswer$15Break-even point (units)AnswerAnswer4,0002,000Margin of safety (units)AnswerAnswer3001,000

Contribution margin is the differential value of sales revenue and variable costs. It measures the contribution of the product in the overall profitability of the firm. The portion which is left after deducting fixed costs from the contribution margin is known as profit. It helps to separate the variable cost and fixed costs related to the product to check its profitability. Case A Case B Case C Case D Unit Sales 1,000 800 4,300 3,000 Sales revenue $20,000 $1,600 $137,600 $60,000 Variable cost per unit $10 $1 $12 $5 Contribution margin $10,000 $800 $86,000 $45,000 Fixed costs $7,000 $300 $80,000 $30,000 Net income $3,000 $500 $6,000 $15,000 Unit contribution margin $10 $1 $20 $15 Break-even point (units) 700 300 4,000 2,000 Margin of safety (units) 300 500 300 1,000

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Cost-Volume-Profit Relations: Missing Data

Following are data from 4 separate companies. Supply the missing data in each independent case.

	Case A	Case B	Case C	Case D
Unit Sales	1,000	800	Answer	Answer
Sales revenue	$20,000	Answer	Answer	$60000
Variable cost per unit	$10	$1	$12	Answer
Contribution margin	Answer	$800	Answer	Answer
Fixed Costs	$7,000	Answer	$80,000	Answer
Net income	Answer	$500	Answer	Answer
Unit contribution margin	Answer	Answer	Answer	$15
Break-even point (units)	Answer	Answer	4,000	2,000
Margin of safety (units)	Answer	Answer	300	1,000

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