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Question 1 A company produces a single product called the Fidget. The following information relating to the next year has been provided: Sales 1,200,000 Less Variable expenses 840,000 Contribution margin 360,000 Less Fixed expenses 300,000 60,000 Net operating income The company plans to sell 15,000 next year Required: a. Calculate the contribution margin per unit and the contribution margin ratio b. Compute the breakeven point in units and dollar value C. Compute the number of units to be sold in order to earn a profit of $36,000

Question 1 A company produces a single product called the Fidget. The following information relating to the next year has been provided: Sales 1,200,000 Less Variable expenses 840,000 Contribution margin 360,000 Less Fixed expenses 300,000 60,000 Net operating income The company plans to sell 15,000 next year Required: a. Calculate the contribution margin per unit and the contribution margin ratio b. Compute the breakeven point in units and dollar value C. Compute the number of units to be sold in order to earn a profit of $36,000

FINANCIAL ACCOUNTING
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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please answer question F and G

Question 1 A company produces a single product called the Fidget. The following information relating to the next year has been provided: 1,200,000 840,000 360,000 Sales Less Variable expenses Contribution margin Less Fixed expenses 300,000 Net operating income 60,000 The company plans to sell 15,000 next year Required: a. Calculate the contribution margin per unit and the contribution margin ratio b. Compute the breakeven point in units and dollar value C. Compute the number of units to be sold in order to earn a profit of $36,000 d. Calculate the sales value required to earn a profit of $36,000 if the tax rate is 25% Calculate the margin of safety ratio Using an excel sheet, prepare the breakeven chart assuming that the company sells e. f. 15,000 units g. State two (2) assumptions of CVP analysis
Transcribed Image Text:Question 1 A company produces a single product called the Fidget. The following information relating to the next year has been provided: 1,200,000 840,000 360,000 Sales Less Variable expenses Contribution margin Less Fixed expenses 300,000 Net operating income 60,000 The company plans to sell 15,000 next year Required: a. Calculate the contribution margin per unit and the contribution margin ratio b. Compute the breakeven point in units and dollar value C. Compute the number of units to be sold in order to earn a profit of $36,000 d. Calculate the sales value required to earn a profit of $36,000 if the tax rate is 25% Calculate the margin of safety ratio Using an excel sheet, prepare the breakeven chart assuming that the company sells e. f. 15,000 units g. State two (2) assumptions of CVP analysis
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