The Advent Corporation also manufactures chairs and tables at one of their divisions. The following is data for its chair manufacturing department for the month of February. Actual Sales 4,500 Chairs Selling Price $60.00 per chair Variable Costs $15.00 per chair Fixed Costs $72,000
The Advent Corporation also manufactures chairs and tables at one of their divisions. The following is data for its chair manufacturing department for the month of February. Actual Sales 4,500 Chairs Selling Price $60.00 per chair Variable Costs $15.00 per chair Fixed Costs $72,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question 3 Part II
The Advent Corporation also manufactures chairs and tables at one of their divisions. The following is
data for its chair manufacturing department for the month of February.
Actual Sales 4,500 Chairs
Selling Price $60.00 per chair
Variable Costs $15.00 per chair
Fixed Costs $72,000
Required:
a. Calculate the Contribution Margin per chair.
b. Compute the Contribution Margin Ratio.
c. Determine the break-even point in revenue dollars.
d. Calculate the Margin of Safety in revenue dollars.
e. If the company wishes to increase its total dollar contribution margin by 50% in March, by how much
will it have to increase sales, in units, if all factors remain the same?
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