Accounting solution If variable costs are 35% of sales and sales increase by $120,000 thisquarter due to a new product launch, calculate the increase incontribution margin.

Step 1: Definition of Contribution MarginContribution Margin is the portion of sales revenue that…

Answered: If variable costs are 35% of sales and…

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 7DQ

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Similar questions

If the contribution margin ratio increases by 10% and all else remains the same, what is the effect on net income? O a. net income will increase by 20% b. more information is need to answer this question C. net income will increase d. net income will increase by 10%
If the variable cost is P15/unit, fixed cost is 265,000; and Sales is P55. Find the BEPs, and BEPx. Use the Target Profit Analysis Equation Method. Compute for the following: • Contribution Margin Ratio • Break-Even Point in Sales • Break-Even Point in Units IMPORTANT NOTE: PLEASE REFER TO THE GIVEN LESSON. USE THE FORMULA FROM THE LESSON IN THE PHOTE ATTACHED. THANK YOU. I will give you upvote for this.
Marigold Corp. is using the target cost approach on a new product. Information gathered so far is as follows: Expected annual sales Desired profit per unit Target cost What is the unit selling price? O $0.30 O $0.64 O $0.62 O $0.32 500000 units $0.32 $150000
Using the following data, estimate the new Return on Investment if there is a 10% decrease in variable and fixed costs - with average operating assets as the base. Sales $2,000,000 Variable costs 1.100.000 Contribution margin 900.000 Controllable fıxed costs 300.000 IControllable margin $600,000 Average operating assets $5,000,000 Round to two decimal places. Be sure to enter the answer as a percentage but do not include the % sign.
Which of the following would produce the largest increase in the contribution margin per unit? Select one: a. A 15% decrease in selling price. b. A 14% increase in variable cost. c. A 23% increase in the number of units sold. d. A 17% decrease in fixed cost. e. A 7% increase in selling price.
If sales are $30,000, fixed costs are $10,000, and variable costs are $7,000 what is the contribution margin ratio? O 0.594 O 0.767 O 0.612 0.659
Using the following data, estimate the new Return on Investment if there is a 11% decrease in variable and fixed costs- with average operating assets as the base. Sales $3,634,424 Contribution margin Controllable fixed costs Average operating assets 49% 278,080 $5,083,234 Round to two decimal places. Be sure to enter the answer as a percentage but do not include the *% sign.
please step by step solution.
If sales are $500,000, variable cost are $200,000, and fixed costs are $240,000, what is the contribution margin ratio?
If revenue = $90 and variable cost = 35% of revenue, then contribution margin = $58.50. Options a. True. b. False.
A 10 % decrease in the selling price of a product will have the same impact on net income as a 10 % increase in the variable expenses. Do you agree? Why or why not? Give an example.
Total fixed cost of a product is IDR 10,000,000 and variable cost is IDR 50,000 per unit. The sale price is IDR.75,000 per unit . How much products should be produced to get BEP? Prove your answer and make a graphic. ..And If the company need profit IDR 10,000,000. How much is the sales price? Prove your answer.

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If variable costs are 35% of sales and sales increase by $120,000 this quarter due to a new product launch, calculate the increase in contribution margin.