LO20-1, LO20-4For each of the six independent situations that follow, compute the missing amounts.EXERCISE 20.5Using contribution margin per unit:a.Cost-Volume-ProfitOperatingIncomeRelationshipsVariableContributionFixedSalesCostsMargin per UnitCostsUnits Sold(1)2$$120,000$20$$25,0004,000(2)180.00045,00030,0005,000(3)600,00030150,00090,000b. Using the contribution margin ratio:VariableContributionOperatingSalesCostsMargin RatioFixed CostsIncome(1)$900,000$720,000%$95,000(2)600,00040%75,000(3)30%90,00060,000

contribution margin per unit = contribution margin / number of units sold contribution margin…

LO20-1, LO20-4 For each of the six independent situations that follow, compute the missing amounts. EXERCISE 20.5 a. Using contribution margin per unit: Cost-Volume-Profit Operating Income Variable Contribution Fixed Relationships Sales Costs Margin per Unit Costs Units Sold (1) 24 $120,000 $20 2$ $25,000 4,000 (2) 180,000 45,000 30,000 5,000 (3) 600,000 30 150,000 90,000 b. Using the contribution margin ratio: Variable Contribution Margin Ratio Operating Income Sales Costs Fixed Costs (1) $900,000 $720,000 $95,000 (2) 600,000 40% 75,000 (3) 30% 90,000 60,000

LO20-1, LO20-4 For each of the six independent situations that follow, compute the missing amounts. EXERCISE 20.5 a. Using contribution margin per unit: Cost-Volume-Profit Operating Income Variable Contribution Fixed Relationships Sales Costs Margin per Unit Costs Units Sold (1) 24 $120,000 $20 2$ $25,000 4,000 (2) 180,000 45,000 30,000 5,000 (3) 600,000 30 150,000 90,000 b. Using the contribution margin ratio: Variable Contribution Margin Ratio Operating Income Sales Costs Fixed Costs (1) $900,000 $720,000 $95,000 (2) 600,000 40% 75,000 (3) 30% 90,000 60,000

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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#15
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We sell two products: Product #1 Product #2 Total Sales $200,000 $400,000 $600,000| Variable Expenses 120,000 350,000 470,000 Contribution Margin 80,000 50,000 130,000 CM Ratio 40% 12.5% 21.67% Fixed Expenses total $30,000. What is the breakeven point based on the current sales mix? A. $600,000 B. $75,000 C. $138,440 D. $240,000 4.
A6
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If sales are $796,000, variable costs are 76% of sales, and income from operations is $230,000, what is the contribution margin ratio? Oa. 76% Оb. 72% Ос. 28% Od. 24%
A. Determine the missing amounts S.No Unit Selling Price Unit Variable Cost Contribution Margin per unit Contribution Margin Ratio 1 2 3 550 1500 (e) 370 (c) (f) (a) 600 900 (b) (d) 30 B. For Al Farabi Company, variable costs are 75% of sales, and fixed costs are $210,000.Management’snet income goal is $70,000. Compute the required sales needed to achieve management’s target net income of $70,000. (Use the mathematical equation approach.) C. Company A’s costs are mostly variable, whereas Company B’s costs are mostly fixed. When sales increase, which company will tend to realize the greatest increase in profits? Explain.
Determine the missing amounts. elling te $640 $300 1300 (e) LA MA $ Unit Variable Costs $352 207 (c) 975 (f) Unit Contribution Margin 288 $93 $325 (a) Contribution Margin Ratio 1 % (b) % (d) 25 %
(e) Product Blue Product Red Selling $12.00 $24.00Variable cost $4.00 $8.00Contribution margin $8.00 $16.00Fixed costs apportioned $200,000 $400,00Budgeted Sales Units 140,000 60,000 Calculate the breakeven points, for each product and the company as a whole and comment on your findings f)Discuss the merits and demerits of the cost volume profit analysis (CVP)