Answer:
The calculations are shown below.
Explanation:
The computation is shown below:
a. The price charged per unit is
= Variable cost per unit + Contribution margin per unit
where,
Variable cost per unit is $4.56
And, the contribution margin per unit is
Contribution margin per unit = Fixed cost ÷ Break even units
$349,600 ÷ 115000
= $3.04 per unit
So, the price charged is
= $4.56 + $3.04
= $7.60 per unit
b. The variable cost per unit is
= Selling price per unit - contribution margin per unit
where,
Selling price per unit = $120
And, the Contribution margin per unit is
= ($458,000 + $166,000) ÷ 15,600 units
= $40 per unit
So, the variable cost per unit is
= $120 - $40
= $80 per unit
And, the contribution margin ratio is
= Contribution margin per unit ÷ Selling price per unit
= $40 ÷ $120 × 100
= 33.33%
c. The total fixed cost is
= Contribution - Net income
= $235,000 × 0.25 - $22,500
= $58,750 - $22,500
= $36,250
d. Contribution margin per unit is
= $103,840 ÷ 23,600 units
= $4.40 per unit
And, Selling price per unit is
= $4.40 ÷ 44%
= $10 per unit
And, Variable cost per unit is
= $10 × 56%
= $5.60 per unit
Since the variable cost ratio is 0.56
So, we assume the sales is 0.100
And, the contribution margin ratio is 0.44
