Calculate the variable cost ratio Wilson Athletics plans to sell 4,800 tennis rackets at$95 each in the coming year. The unit variable cost is$57.50 (includes direct materials, direct labor, variablefactory overhead, and variable selling expense). Fixedfactory overhead is $28,500, and fixed selling andadministrative expenses are $39,200.I. Calculate the variable cost ratio.2. Calculate the contribution margin ratio.

Provided Data:Units planned to sell = 4,800Selling price per unit = $95Unit variable cost =…

Answered: Wilson Athletics plans to sell 4,800…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 7PA: Manatoah Manufacturing produces 3 models of window air conditioners: model 101, model 201, and model...

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Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and trim kits. Fixed cost equals 146,000. Each door handle sells for 12 and has variable cost of 9; each trim kit sells for 8 and has variable cost of 5. Required: 1. What are the contribution margin per unit and the contribution margin ratio for door handles and for trim kits? 2. If Polaris sells 20,000 door handles and 40,000 trim kits, what is the operating income? 3. How many door handles and how many trim kits must be sold for Polaris to break even? 4. CONCEPTUAL CONNECTION Assume that Polaris has the opportunity to rearrange its plant to produce only trim kits. If this is done, fixed costs will decrease by 35,000, and 70,000 trim kits can be produced and sold. Is this a good idea? Explain.
Calculate the contribution margin ratio?
Calculate the variable cost ratio?
Wilson Athletics plans to sell 4,800 tennis rackets at $95 each in the coming year. The unit variable cost is $57.50 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Fixed factory overhead is $28,500, and fixed selling and administrative expenses are $39,200. 1. Calculate the variable cost ratio. 2. Calculate the contribution margin ratio.
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