Sales price perunit:
(current monthly sales volume is120,000 units). . . .
$25.00
Variable costs perunit:
Directmaterials. . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . .
$6.60
Directlabor. . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . ..
$7.00
Variablemanufacturing overhead. . . . . . . .. . . . . . . . . . . . . . . . . . . . . .
$2.40
Variableselling and administrative expenses. .. . . . . . . . . . . . . . . . . . .
$1.90
Monthly fixedexpenses:
Fixedmanufacturing overhead. . . . . . . .. . . . . . . . . . . . . . . . . . . . . . .
$241,900
Fixedselling and administrative expenses. .. . . . . . . . . . . . . . . . . . . . . . . . . . . ..
$327,900
Requirement 1. What is the? company'scontribution margin per? unit? Contribution margin? percentage?Total contribution? margin?
Begin by identifying the formula.
| | – | | = | Contribution margin per unit | |
The contribution margin per unit is
?$nothing.
What is the? company's contribution margin? percentage?
Begin by identifying the formula.
( | | / | | ) = | Contribution margin percentage |
?(Round your answer to the nearest whole? percent.)
The contribution margin percentage is
nothing?%.
What is the? company's total contribution? margin?
Begin by identifying the formula.
The total contribution margin is
?$nothing.
Requirement 2. What would the? company'smonthly operating income be if the company sold
150 comma 000150,000
?units?
Use the following table to compute the operating income if
150 comma 000150,000
units are sold.
Requirement 3. What would the? company'smonthly operating income be if the company had sales of
$ 4 comma 500 comma 000$4,500,000??
Use the following table to compute the operating income withsales totaling
$ 4 comma 500 comma 000$4,500,000.
?(Enter the contribution margin ratio to the nearest whole?percent.)
Requirement 4. What is the breakeven point in?units? In sales? dollars?
Begin by identifying the formula.
( | | + | | ) / | | = | Breakeven sales in units |
?(Round the breakeven point in units up to the nearestwhole? unit.)
The? company's breakeven point is
nothing
units.
What is the breakeven point in sales? dollars?
Begin by identifying the formula.
( | | + | | ) / | | = | Breakeven sales in dollars |
?(Round the breakeven point in sales dollars up to thenearest whole? dollar.)
The breakeven point in dollars is
?$nothing.
Requirement 5. How many units would the companyhave to sell to earn a target monthly profit of
$ 260 comma 400$260,400??
Begin by identifying the formula.
( | | + | | ) / | | = | Target sales in units | |
?(Round your answer up to the nearest whole? unit.)
In order to earn a monthly profit of
$ 260 comma 400$260,400?,
the company must sell
nothing
units.
Requirement 6. Management is currently incontract negotiations with the labor union. If the negotiations?fail, direct labor costs will increase by
99?%,
and fixed costs will increase by
$ 24 comma 400$24,400
per month. If these costs? increase, how many units will thecompany have to sell each month to break? even? ?(Round your answerup to the nearest whole? number.)
The new breakeven point is
nothing
units.??
Requirement 7. Return to the original data forthis question and the rest of the questions. What is the? company'scurrent operating leverage factor? (round to two? decimals)?
Begin by identifying the formula.
| | / | | = | Operating leverage factor | |
?(Round your answer to two decimal? places.)
The operating leverage factor is
nothing.
Requirement 8. If sales volume increases by
66?%,
by what percentage will operating income? increase? ?(Round thepercentage to one decimal? place.)
The operating income will increase by
nothing?%.
Requirement 9. What is the? company's currentmargin of safety in sales? dollars? What is its margin of safety asa percentage of? sales?
Begin by identifying the formula.
| | - | | = | Margin of safety in dollars | |
The current margin of safety is
?$nothing.
What is its margin of safety as a percentage of? sales?
Begin by identifying the formula.
| | / | | = | Margin of safety percentage | | |
?(Round the percentage to the nearest whole? percent.)
The margin of safety as a percentage of sales is
nothing?%.
Requirement 10. Say the company adds a secondline of flash drives? (32 GB in addition to 16? GB). A unit of the32 GB flash drives will sell for
$ 50$50
and have variable cost per unit of
$ 28$28
per unit. The expected sales mix is
fourfour
of the small flash drives? (16 GB) for every one large flashdrive? (32 GB). Given this sales? mix, how many of each type offlash drive will the company need to sell to reach its targetmonthly profit of
$ 260 comma 400$260,400??
Is this volume higher or lower than previously needed? (inQuestion? 5) to achieve the same target? profit? Why?
Begin by computing the? weighted-average contribution margin perunit. ?(Round all amounts to the nearest? cent, $X.XX.)
| | 16 GB | 32 GB | Total |
| | | |
Less: | | | | |
| | | |
| | | |
| | | |
Weighted average contribution margin per unit | | | |
Given this sales? mix, how many of each type of flash drive willthe company need to sell to reach its target monthly profit of
$ 260 comma 400$260,400??
?(Round new target sales in units up to the next wholeunit. Round units of the smaller drives and larger units to thenearest whole? unit.)
The new target sales in units is
nothing.
The company will need to sell
nothing
units of the smaller drives and
nothing
units of the larger units.
Is this volume higher or lower than previously needed? (inQuestion? 5) to achieve the same target? profit? Why?
The target sales is
?
higher than
lower than
the same as
before because now the company is selling a product with
?
a much higher
a much lower
the same
unit contribution margin.
