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LiRa [457]
2 years ago
11

Gabby Company sells a product for $ 100 per unit. Variable costs are $ 60 per​ unit, and fixed costs are $ 2 comma 500 per month

. The company expects to sell 600 units in September. Calculate the contribution margin per​ unit, in​ total, and as a ratio.
Business
1 answer:
Ann [662]2 years ago
4 0

Answer:

(a) $40

(b) $24,000

(c) 40%

Explanation:

Given that,

Selling price = $100 per unit

Variable costs = $60 per​ unit

Fixed costs = $2,500 per month

Contribution margin per unit:

= Selling price - Variable costs

= $100 per unit - $60 per​ unit

= $40

Total Contribution margin:

= Contribution margin per unit × No. of units sold

= $40 × 600 units

= $24,000

Contribution margin ratio:

= (Selling price - Variable costs) ÷ Selling price

= ($100 per unit - $60 per​ unit) ÷ $100 per unit

= 0.4 or 40 %

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Because other firms are willing to pay to advertise with them, suppliers of nonrival private goods often modify their products t
OLEGan [10]

Answer:

b. Public Goods

Explanation:

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It is the type of goods and services , which each and every person can use , without any kind of restriction , is known as public goods .

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3 years ago
When it comes to investing, what is the typical relationship between risk and return
Harlamova29_29 [7]
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8 0
2 years ago
Read 2 more answers
Sin Qua Corporation is a company listed on the stock exchange and issues corporate bonds. Which statement is most likely true?
ch4aika [34]

Answer:

Investors will have to pay tax on the interest income received from the bonds.

Explanation:

Interest earned from corporate bonds and capital gained through corporate bond transactions is taxable income.  The interest earned from a corporate bond is subject to taxation by both the federal and state governments.

The government will not sell sin Qua corporation bonds as it is a public company.  Bonds do not pay interest quarterly but rather semi-annually or annually.  Again, the maturity of the bond is determined at the time they are issued. Creditworthiness will only affect the bond price but not its maturity period.

Investors will have to pay tax on the interest income received from the bonds is thus the correct statement.

8 0
3 years ago
Break-Even Sales Under Present and Proposed Conditions
solong [7]

Answer:

<h3>Portmann Company</h3>

1. Total variable costs = $89,000,000

Total fixed costs = $40,600,000

2. a Unit variable cost = $89

b. Unit contribution margin = $100

3. Break-even sales (units) = Fixed cost/Contribution margin per unit

= $40,600,000/$100

= 406,000 units

4. Break-even sales (units) = Fixed cost/Contribution margin per unit

= $45,100,000/$100

= 451,000 units

5. Break-even sales (units) to achieve target profit = (Fixed cost + Target Profit)/Contribution margin per unit

= ($45,100,000 + $59,400,000)/$100

= 1,045,000 units

6. Maximum operating income possible with the expanded plant is:

= $61,900,000

7. Operating income if the proposal is accepted and sales remain at the current level is:

= $54,900,000

Explanation:

a) Data and Calculations:

Sales volume during current year = 1,000,000

Sales price per unit during current year = $189

Income statement is as follows:

Sales                                $189,000,000

Cost of goods sold           (101,000,000)

Gross profit                      $88,000,000

Expenses:

Selling expenses             $16,000,000

Administrative expenses  12,600,000

Total expenses                (28,600,000)

Operating income          $59,400,000

                                      Variable    Fixed

Cost of goods sold           70%        30%

Selling expenses              75%        25%

Administrative expenses 50%        50%

Total variable costs for the current year:

                                      Variable  

Cost of goods sold           70% * $101,000,000 = $70,700,000

Selling expenses              75% * $16,000,000 =     12,000,000

Administrative expenses 50% * $12,600,000 =      6,300,000

Total variable costs = $89,000,000

Variable unit cost = $89 ($89,000,000/1,000,000)

Contribution per unit = $100 ($189 - $89)

Total fixed costs for the current year:

                                          Fixed

Cost of goods sold             30% * $101,000,000 = $30,300,000

Selling expenses                25% * $16,000,000  =      4,000,000

Administrative expenses   50% * $12,600,000 =       6,300,000

Total fixed costs =  $40,600,000

Projected sales for the next year = $202,230,000 ($189,000,000 + $13,230,000)

Percentage Increase in sales for the next year = $13,250,000/$189,000,000 * 100 = 7%

Fixed costs caused by expansion = $4,500,000

Total fixed costs = $45,100,000 ($40,600,000 + $4,500,000)

Variable costs = $95,230,000 ($89,000,000 * 1.07)

Contribution margin:

Sales                                $202,230,000

Variable costs                      95,230,000

Contribution margin        $107,000,000

Expenses:

Fixed costs                          45,100,000

Operating income            $61,900,000

Sales volume = 1,070,000 units (1,000,000 * 1.07)

Contribution per unit = $107,000,000/1,070,000 = $100

Sales at current level:

Sales                                $189,000,000

Variable costs                     89,000,000

Contribution                    $100,000,000

Fixed costs                          45,100,000  

Operating income           $54,900,000

6 0
2 years ago
Identify the internal control weakness in the following situations. State how the person can hurt the company.
Degger [83]

Answer:

Identification of the Internal Control Weaknesses:

A.  There is no segregation of duties and there is lack of access control.  Jerry Miller as a security guard is not expected to have a master key to the cash box.  With this he can pilfer the cash.  If he prepares the report that shows the number of cars that parked on the lot, he is not supposed to also prepare the day's cash receipts.  Otherwise, he can state any number of cars as parked that he likes, and which corresponds to the cash he might leave in the Cash box since he also has a master key.

B.  There is no segregation of duties and there is lack of supervision,  proper reconciliations, and assets audit.  Sharon Fisher handles purchase transactions from the beginning to the close all alone with a third party.  This exposes the company to procurement frauds and collusion with suppliers.  She can purchase assets for the company at prices that would enrich her personally.

C. Forming an audit opinion on the basis of ratio analysis of last year's comparative financial statements exposes the company to audit risks.  While ratio analysis is part of the basis for forming audit opinions, it is surely not the first audit procedure to obtain audit evidence to support his audit opinion on the financial statements.  An auditor is expected to obtain sufficient audit evidence and perform audit substantive tests of financial statement assertions.  He or she is also expected to review the internal control system to ensure that it is operating effectively after establishing its existence and reviewing changes in internal controls.

Explanation:

Internal Controls are controls established by management in order to help it achieve business goals.  There are many internal controls, including Separation of Duties, Access Controls , Authorization and Approvals, Asset Audits, Reconciliations, and Data Backups.  The purposes of internal controls are to establish the reliability of financial reporting, ensure timely feedback on the achievement of operational or strategic goals, and achieve compliance with financial management laws, and accounting regulations.

4 0
3 years ago
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