Provide Right answer Vernon Company reported the following data regarding theproduct it sells:Sales price$70Contribution margin ratio 15%Fixed costs$223,000Use the contribution margin ratio approach.To obtain a profit of $59,000, what must the sales be in dollars?In units?

Concept of Contribution Margin RatioThe contribution margin ratio represents the percentage of sales…

Answered: Vernon Company reported the following…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 4EA: A product has a sales price of $250 and a per-unit contribution margin of $75. What is the...

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Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?
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Vernon Company reported the following data regarding the product it sells: Sales price $70 Contribution margin ratio 15% Fixed costs $223,000 Use the contribution margin ratio approach. To obtain a profit of $59,000, what must the sales be in dollars? In units?