Data Table %3D Sales price per unit $ 1,900 (f) $4 2,000 Variable costs per unit (a) 3,750 1,100 Total fixed costs 209.000 675,000 (k) Target profit 427,500 16,975,000 1,080,000 Contribution margin per unit 475 (g) () Contribution margin ratio (b) 25% (m) Required units to break even (c) (h) 300 units Required sales dollars to break even (d) (0) (n) Required units to achieve target profit (e) Print Done

Data Table %3D Sales price per unit $ 1,900 (f) $4 2,000 Variable costs per unit (a) 3,750 1,100 Total fixed costs 209.000 675,000 (k) Target profit 427,500 16,975,000 1,080,000 Contribution margin per unit 475 (g) () Contribution margin ratio (b) 25% (m) Required units to break even (c) (h) 300 units Required sales dollars to break even (d) (0) (n) Required units to achieve target profit (e) Print Done

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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Which of the following statements is true? Select one: O a. The most complex of the cost estimation methods is the high-low method. O b. Engineering approach approximates cost function by classifying each account as either variable or fixed based on the analyst's knowledge of how the account behaves. C The high-low method of deriving an estimated cost line uses all the data points available. O d. In approximating the cost function, the account analysis classifies costs based upon an industrial engineer's evaluation of production methods, and material, labor, and overhead requirements. O e. The high-low method is used to derive an estimated line of cost behavior by graphically connecting the two cost amounts identified with the highest and lowest volume levels.
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On a cost-volume-profit graph, the revenue line will be shown below the total expense line for any activity level above the break-even point. FALSE O TRUE
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1. Now change all of the dollar amounts in the data area of your worksheet so that it looks like this: 1 2 3 Data 4 Sales Variable costs: 5 67 00 8 A Chapter 1: Applying Excel 9 10 11 Cost of goods sold Variable selling Variable administrative Fixed costs: Fixed selling Fixed administrative $ $ $ $ $ $ B 32,000 16,000 1,600 1,400 2,500 1,500
10 Ritchie Manufacturing Company makes a product that it sells for $160 per unit. The company incurs variable manufacturing costs of $84 per unit. Variable selling expenses are $12 per unit, annual fixed manufacturing costs are $470,000, and fixed selling and administrative costs are $208,400 per year. Required Determine the break-even point in units and dollars using each of the following approaches: Skipped a. Use the equation method. b. Use the contribution margin per unit approach. c. Use the contribution margin ratio approach. d. Prepare a contribution margin income statement for the break-even sales volume.
When preparing a forecasted contribution margin income statement and you are given the units produced, how do you compute dollars per unit?