What is Dairy Day's contribution margin ratio? On accounting question Dairy Days Ice Cream sells ice cream cones for $5 per customer.Variable cost $1 per coneFixed cost$2,300 per monthWhat is Dairy Days' contribution margin ratio?A. 256%B. 80%C. 62%D. 600%

Step 1:- Introduction to the Variable CostVariable costs are expenses that alter as a company's…

Answered: Dairy Days Ice Cream sells ice cream…

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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Assume a Potbelly's restaurant has the following information available regarding costs at represent- tive levels of monthly sales: Monthly sales in units 5,000 8,000 10,000 Cost of food sold. $10,000 $16,000 $20,000 Wages and fringe benefits.........................4,200 4,320 4,400 Fees paid delivery help...........................1,100 1,760 2,200 Rent on building. 1,100 1,100 1,100 . 900 900 900 Utilities Depreciation on equipment... Supplies (soap, floor wax, etc.).. 1,700 1,700 Total........ .800 920 1,000 ...........1,700. ..250 340 400 Administrative costs..... $20,050 $27,040 $31,700 Required a. Identify each cost as being variable, fixed, or mixed. b. Use the high-low method to develop a schedule identifying the amount of each cost that is mixed or variable per unit. Total the amounts under each category
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Last month Annie's Homemade sold 5,000 servings of ice cream for $5.00 each. Its variable cost is $1.25 per serving and its total fixed costs were $11,000. Required: 1. What was last month's margin of safety? 2. What was last month's margin of safety percentage? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What was last month's margin of safety? Margin of safety
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Izzy Ice Cream has the following price and cost information: Price per 2-scoop sundae $ 5.00 Variable cost per sundae: Ingredients 1.35 Direct labor 0.45 Overhead 0.20 Fixed cost per month $ 5,400 Required: 1. Determine Izzy’s break-even point in units and sales dollars. 2. Determine how many sundaes must be sold to generate a profit of $10,800. 3. Calculate Izzy’s new break-even point for each of the following independent scenarios: a. Sales price decreases by $0.50. b. Fixed costs decrease by $300 per month. c. Variable costs increase by $0.50 per sundae. 4. Based on the original information, how many sundaes must Izzy sell to generate a profit of $26,000, if sales price increases by $0.50 and variable costs increase by $0.30?
Company A wants to earn $5,000 profit in the month of January. If their fixed costs are $10,000 and their product has a per-unit contribution margin of $250, how many units must they sell to reach their target income? A.20 B. 40 C. 60 D. 120
Maple Enterprises sells a single product with a selling price of $75 and variable costs per unit of $30. The companys monthly fixed expenses are $22,500. What is the companys break-even point in units? What is the companys break-even point in dollars? Construct a contribution margin income statement for the month of September when they will sell 900 units. How many units will Maple need to sell in order to reach a target profit of $45,000? What dollar sales will Maple need in order to reach a target profit of $45,000? Construct a contribution margin income statement for Maple that reflects $150,000 in sales volume.
West Island distributes a single product. The companys sales and expenses for the month of June are shown. Using the information presented, answer these questions: A. What is the break-even point in units sold and dollar sales? B. What is the total contribution margin at the break-even point? C. If West Island wants to earn a profit of $21,000, how many units would they have to sell? D. Prepare a contribution margin income statement that reflects sales necessary to achieve the target profit.
Sales Needed to Earn Target Income Chillmax Company plans to sell 3,500 pairs of shoes at 60 each in the coming year. Variable cost is 35% of the sales price; contribution margin is 65% of the sales price. Total fixed cost equals 78,000 (includes fixed factory overhead and fixed selling and administrative expense). Required: 1. Calculate the sales revenue that Chillmax must make to earn operating income of 81,900 by using the point in sales equation. 2. Check your answer by preparing a contribution margin income statement based on the sales dollars calculated in Requirement 1.

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Dairy Days Ice Cream sells ice cream cones for $5 per customer. Variable cost $1 per cone Fixed cost $2,300 per month What is Dairy Days' contribution margin ratio? A. 256% B. 80% C. 62% D. 600%