60.1K

Verified Solution

Link Copied!

Fill-in-the-Blank Equations

1. = Difference in Total Cost Difference in Units Produced

2. = Total Costs (Variable Cost per Unit Units Produced)

3. Contribution Margin = Sales

4. Contribution Margin Ratio = Sales

5. Change in Operating Income = Contribution Margin Ratio

6. = Sales Price per Unit Variable Cost per Unit

7. Change in Operating Income = Unit Contribution Margin

8. = Fixed Costs Unit Contribution Margin

9. Break-Even Sales (dollars) = Fixed Costs

10. Sales (units) = ( + Target Profit) Unit Contribution Margin

11. Sales (dollars) = (Fixed Costs + Target Profit)

12. Operating Leverage = Contribution Margin

13. = Percent Change in Sales Operating Leverage

14. Margin of Safety (percent of current sales) = (Sales Sales at Break-Even Point)

15. Margin of Safety (dollars) = Sales (dollars)

16. Margin of Safety (units) = Break-Even Sales (units)

1. During 20Y5, Cards by Shannon sold 50,000 finished products with a contribution margin of 55%. The variable costs totaled $40,500 for the year. Determine the sales, contribution margin, and unit contribution margin.
2. A new manufacturing company would like to know the sales needed to break even for the first year of operations. The expected total fixed costs will be $27,000 for 15,000 units. The company expects to sell the units for $10 each and incur variable cost of $4 per unit. Determine the break-even sales point in dollars and units.

Answer & Explanation Solved by verified expert

See Answer