Cullumber Bucket Co., a manufacturer of rain barrels, had the following data for 2019.Sales 2,990 unitsSales price $40 per unitVariable costs $20 per unitFixed costs $35,880 (a)What is the contribution margin ratio?Contribution margin ratio(b)What is the break-even point in dollars?Break-even point$ (c)What is the margin of safety in dollars and as a ratio?Margin of safety$Margin of safety ratio%(d)If the company wishes to increase its total dollar contribution margin by 30% in 2020, by how much will it need to increase itssales if selling price per unit, variable price per unit and total fixed costs remain constant?Total increase in sales required:%24

Answered: Cullumber Bucket Co., a manufacturer of…

Cullumber Bucket Co., a manufacturer of rain barrels, had the following data for 2019. Sales 2,990 units Sales price $40 per unit Variable costs $20 per unit Fixed costs $35,880

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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Concept explainers

Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.

Question

Cullumber Bucket Co., a manufacturer of rain barrels, had the following data for 2019.

Sales	2,990	units
Sales price	$40	per unit
Variable costs	$20	per unit
Fixed costs	$35,880

(a)
What is the contribution margin ratio?
Contribution margin ratio
(b)
What is the break-even point in dollars?
Break-even point
$

(c)
What is the margin of safety in dollars and as a ratio?
Margin of safety
$
Margin of safety ratio
%
(d)
If the company wishes to increase its total dollar contribution margin by 30% in 2020, by how much will it need to increase its
sales if selling price per unit, variable price per unit and total fixed costs remain constant?
Total increase in sales required:
%24

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