Contribution Margin per unit is the excess between Selling Price per unit and Total Variable Costs per unit associated with the product. It is that proportion of Revenue per unit which is left after deduction of Total Variable Costs per unit. Break- even point is calculated by dividing Total Fixed Costs incurred by Contribution Margin per unit of the product. It is a point where Total Revenue equals the Total Costs of the concern. In simple terms, it is the point where there is no profit or loss. After this point, Revenue begins to exceed the Costs incurred. Contribution Margin per unit and (2) Break- even point in units of SBD Phone Company

Question

Want to see the full answer?

Answer 1

Question

Chapter 21, Problem 6QS

To determine

Introduction:

Contribution Margin per unit is the excess between Selling Price per unit and Total Variable Costs per unit associated with the product. It is that proportion of Revenue per unit which is left after deduction of Total Variable Costs per unit.

Break- even point is calculated by dividing Total Fixed Costs incurred by Contribution Margin per unit of the product. It is a point where Total Revenue equals the Total Costs of the concern. In simple terms, it is the point where there is no profit or loss. After this point, Revenue begins to exceed the Costs incurred.

Contribution Margin per unit and (2) Break- even point in units of SBD Phone Company

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Miguel Manufacturing Company uses a predetermined manufacturing overhead rate based on direct labor hours. At the beginning of 2023, they estimated total manufacturing overhead costs at $2,352,000, and they estimated total direct labor hours at 7,000. The administration and selling overheads are to be absorbed in each job cost at 15% of prime cost. Distribution cost should be added to each job according to quotes from outside carriage companies. The company wishes to quote for job # 222. Job stats are as follows: Direct materials cost Direct labour cost $173,250 $240,000 500 hours Direct labour hours Special Design Cost Distribution quote from haulage company Units of product produced $8,750 $21,700 400 cartons a) Compute Miguel's Manufacturing Company predetermined manufacturing overhead rate for 2023. b) How much manufacturing overhead was allocated to Job #222? c) Calculate the total cost & quotation price of Job #222, given that a margin of 25% is applied. d) How much was the…

Faced with rising pressure for a $17 per hour minimum wage rate, the farming industry is currently exploring the possible use of robotics to replace some farm workers. The Produce Bot is one such robot; its job is to thin out a field of lettuce, removing the least promising buds of lettuce. By removing these weaker plants, the stronger lettuce plants have more room to grow. Assume the following facts: i (Click the icon to view the information.) While the Produce Bot itself may be in workable condition for up to five years, assume that the farm would view its implementation as a one-year experiment. Requirement Perform a cost-benefit analysis for the first year of implementation to determine whether the Produce Bot would be a financially viable investment if the minimum wage is raised to $17 per hour. (Round your answers to the „bola dallon\ Cost-Benefit Analysis Expected Benefits (Cost Savings): Total expected benefits Expected Costs: Total expected costs Net expected benefit (cost)…

Please help me with the last entry. The dropdown options are the revenue accounts i can use