Question

Boards Inc. fabricates skateboards that the company sells for $ 37.50 each. Fixed costs for the last 12 months equaled $4,800. For the same period variable cost per unit equaled $22.50. Use the unit variable cost and sales price to calculate the unit contribution margin: BLANK-1 Calculate the breakeven sales volume. BLANK-2 Calculate the sales volume necessary to produce a target Net Income of $3,000 per month. BLANK-3 The skateboards are manufactured in an old factory that relies heavily on worker labor. The company is considering the construction of a new automated plant that would increase fixed costs by $ 4,320 per month, but decrease the variable cost per board by $ 8.50. What would the fixed costs and unit variable costs be under the proposal. Use the unit variable cost and sales price to calculate the unit contribution margin: Fixed Cost BLANK-4 Variable cost per unit BLANK-5 Contribution Margin per unit BLANK-6 Compute the breakeven under the new proposal. BL

Answer 1

Answer:

Check the explanation

Explanation:

1. What would the fixed costs and unit variable costs be under the proposal. Use the unit variable cost and sales price to calculate the unit contribution margin:

     Fixed cost            Variable cost per unit  Contribution Margin per unit

                                                                                   (sales price – VC)

4800+4320 = 9120     22.50-8.50 = 14.00          37.50-14 = 23.50

 

2) Break even = 9120/23.50 = 388 Units

So the breakeven under the new proposal is 388 Units.