Klamath Company produces a single product. The projected income statement for the coming year is as follows: Sales (67,100 units @ $32.00) $2,147,200 Total variable cost 579,744 Contribution margin $ 1,567,456 Total fixed cost 1,693,600 Operating income $ (126,144) Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Unit contribution margin $ Break-even units units 2. Suppose 10,000 units are sold above breakeven. What is the operating income? $ 3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue. Contribution margin ratio % Break-even sales revenue $ Suppose that revenues are $200,000 more than expected for the coming year. What would the total operating income be? $
Klamath Company produces a single product. The projected income statement for the coming year is as follows: Sales (67,100 units @ $32.00) $2,147,200 Total variable cost 579,744 Contribution margin $ 1,567,456 Total fixed cost 1,693,600 Operating income $ (126,144) Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Unit contribution margin $ Break-even units units 2. Suppose 10,000 units are sold above breakeven. What is the operating income? $ 3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue. Contribution margin ratio % Break-even sales revenue $ Suppose that revenues are $200,000 more than expected for the coming year. What would the total operating income be? $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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ch7-47
Klamath Company produces a single product. The
| Sales (67,100 units @ $32.00) | $2,147,200 |
| Total variable cost | 579,744 |
| Contribution margin | $ 1,567,456 |
| Total fixed cost | 1,693,600 |
| Operating income | $ (126,144) |
Required:
1. Compute the unit contribution margin and the units that must be sold to break even.
| Unit contribution margin | $ |
| Break-even units | units |
2. Suppose 10,000 units are sold above breakeven. What is the operating income?
$
3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue.
| Contribution margin ratio | % |
| Break-even sales revenue | $ |
Suppose that revenues are $200,000 more than expected for the coming year. What would the total operating income be?
$
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VIEW1. unit contribution Margin and units that must be sold to break even
VIEW2. suppose 10000 units are sold above breakeven. what is operating income
VIEW3. contribution Ratio and using contribution ratio to calculate the break even point in sales
VIEWsuppose that revenues are $200,000 more than expected for the coming year. total operating income?
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