Compute the contribution margin per unit and contribution margin ratio of Company P.

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Answer 1

Question

Chapter 3, Problem 28E

a.

To determine

Compute the contribution margin per unit and contribution margin ratio of Company P.

b.

To determine

Compute the number of units that company K must sell to break even.

c.

To determine

Ascertain the sales revenue required to earn (pretax) income that equal to 20% of revenue.

d.

To determine

Ascertain the number of units that Company P must sell to generate an after-tax profit of $109,200 if the tax rate is 35%.

e.

To determine

Ascertain the amount of increase in sales units that is necessary to justify the expenditure.

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Maharaj Garage & Car Supplies sells a variety of automobile cleaning gadgets including a variety of hand vacuums. The business began the first quarter (January to March) of 2024 with 20 (Mash up Dirt) deep clean, cordless vacuums at a total cost of $126,800. During the quarter, the business completed the following transactions relating to the "Mash up Dirt" brand. January 8 January 31 February 4 February 10 February 28 March 4 March 10 March 31 March 31 105 vacuums were purchased at a cost of $6,022 each. In addition, the business paid a freight charge of $518 cash on each vacuum to have the inventory shipped from the point of purchase to their warehouse. The sales for January were 85 vacuums which yielded total sales revenue of $768,400. (25 of these units were sold on account to Mandys Cleaning Supplies, a longstanding customer) A new batch of 65 vacuums was purchased at a total cost of $449,800 8 of the vacuums purchased on February 4 were returned to the supplier, as they were…

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Answer 2

Question

Chapter 3, Problem 28E

a.

To determine

Compute the contribution margin per unit and contribution margin ratio of Company P.

b.

To determine

Compute the number of units that company K must sell to break even.

c.

To determine

Ascertain the sales revenue required to earn (pretax) income that equal to 20% of revenue.

d.

To determine

Ascertain the number of units that Company P must sell to generate an after-tax profit of $109,200 if the tax rate is 35%.

e.

To determine

Ascertain the amount of increase in sales units that is necessary to justify the expenditure.

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Answer 3

Question

Chapter 3, Problem 28E

a.

To determine

Compute the contribution margin per unit and contribution margin ratio of Company P.

b.

To determine

Compute the number of units that company K must sell to break even.

c.

To determine

Ascertain the sales revenue required to earn (pretax) income that equal to 20% of revenue.

d.

To determine

Ascertain the number of units that Company P must sell to generate an after-tax profit of $109,200 if the tax rate is 35%.

e.

To determine

Ascertain the amount of increase in sales units that is necessary to justify the expenditure.

Expert Solution & Answer

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Answer 4

Question

Chapter 3, Problem 28E

a.

To determine

Compute the contribution margin per unit and contribution margin ratio of Company P.

b.

To determine

Compute the number of units that company K must sell to break even.

c.

To determine

Ascertain the sales revenue required to earn (pretax) income that equal to 20% of revenue.

d.

To determine

Ascertain the number of units that Company P must sell to generate an after-tax profit of $109,200 if the tax rate is 35%.

e.

To determine

Ascertain the amount of increase in sales units that is necessary to justify the expenditure.

Expert Solution & Answer

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Answer 5

Chapter 3, Problem 28E

a.

To determine

Compute the contribution margin per unit and contribution margin ratio of Company P.

b.

To determine

Compute the number of units that company K must sell to break even.

c.

To determine

Ascertain the sales revenue required to earn (pretax) income that equal to 20% of revenue.

d.

To determine

Ascertain the number of units that Company P must sell to generate an after-tax profit of $109,200 if the tax rate is 35%.

e.

To determine

Ascertain the amount of increase in sales units that is necessary to justify the expenditure.

Answer 6

Chapter 3, Problem 28E

a.

To determine

Compute the contribution margin per unit and contribution margin ratio of Company P.

Answer 7

Chapter 3, Problem 28E

a.

To determine

Compute the contribution margin per unit and contribution margin ratio of Company P.

Answer 8

b.

To determine

Compute the number of units that company K must sell to break even.

Answer 9

b.

To determine

Compute the number of units that company K must sell to break even.

Answer 10

c.

To determine

Ascertain the sales revenue required to earn (pretax) income that equal to 20% of revenue.

Answer 11

c.

To determine

Ascertain the sales revenue required to earn (pretax) income that equal to 20% of revenue.

Answer 12

d.

To determine

Ascertain the number of units that Company P must sell to generate an after-tax profit of $109,200 if the tax rate is 35%.

Answer 13

d.

To determine

Ascertain the number of units that Company P must sell to generate an after-tax profit of $109,200 if the tax rate is 35%.

Answer 14

e.

To determine

Ascertain the amount of increase in sales units that is necessary to justify the expenditure.

Answer 15

e.

To determine

Ascertain the amount of increase in sales units that is necessary to justify the expenditure.

Answer 16

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Answer 17

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Answer 18

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Answer 19

Ch. 3 - Prob. 1Q Ch. 3 - Explain the difference between variable costs and...Ch. 3 - What does the term contribution margin per unit...Ch. 3 - Prob. 4Q Ch. 3 - Prob. 5Q Ch. 3 - Prob. 6Q Ch. 3 - Prob. 7Q Ch. 3 - Prob. 8Q Ch. 3 - Why should decision makers focus only on the...Ch. 3 - Prob. 10Q

Compute the contribution margin per unit and contribution margin ratio of Company P.

Compute the contribution margin per unit and contribution margin ratio of Company P.

Compute the number of units that company K must sell to break even.

Ascertain the sales revenue required to earn (pretax) income that equal to 20% of revenue.

Ascertain the number of units that Company P must sell to generate an after-tax profit of $109,200 if the tax rate is 35%.

Ascertain the amount of increase in sales units that is necessary to justify the expenditure.

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