Helsinki Corporation prepared the following contribution format income statement based on a sales volume of 2,000 units (the relevant range of production is 1,000 units to 3,000 units): Item Amount Sales $40,000 Variable expense $24,000 Contribution margin $16,000 Fixed expense $10,000 Net operating income $6,000 Requirements: 1. What is the contribution margin per unit? 2. What is the contribution margin ratio? 3. What is the variable expense ratio? 4. If sales increase to 2,001 units, what would be the increase in net operating income?

Helsinki Corporation prepared the following contribution format income statement based on a sales volume of 2,000 units (the relevant range of production is 1,000 units to 3,000 units): Item Amount Sales $40,000 Variable expense $24,000 Contribution margin $16,000 Fixed expense $10,000 Net operating income $6,000 Requirements: 1. What is the contribution margin per unit? 2. What is the contribution margin ratio? 3. What is the variable expense ratio? 4. If sales increase to 2,001 units, what would be the increase in net operating income?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...

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