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Trava [24]
3 years ago
6

Compute the missing amounts. ​(Enter the contribution margin ratio to nearest​ percent, X%.)

Business
1 answer:
Slav-nsk [51]3 years ago
4 0

Answer:

Contribution margin per unit

A =  $120

B =    $3,000

C =  $3,132

Contribution margin ratio

A = 60%

B =   75%

C = 60%

Units to break even

A =  610 units

B =    220 units

C = 1,200 units

Sales dollars to break even

A = $122,000

B =   $880,000

C = $6,264,000

Units to achieve target profit

A = 2,833 units

B = 1220 units

C = 2,200 units

Explanation:

Contribution margin per unit

Contribution margin = Sales - Variable Costs

                                               A              B                 C

Sales price per unit           $200      $4,000        $5,220

Variable costs per unit      ($80)     ($1,000)      ($2,088)

Contribution Margin          $120      $3,000         $3,132

Contribution margin ratio

Contribution margin ratio = Contribution / Sales × 100

A = $120 / $200 × 100

   = 60%

B =   $3,000  / $4,000 × 100

   = 75%

C = $3,132 / $5,220 × 100

   = 60%

Units to break even

Units to break even = Fixed Cost ÷ Contribution margin per unit

A = $73,200 ÷  $120

   = 610 units

B =   $660,000  ÷   $3,000

   = 220 units

C = $3,758,400 ÷   $3,132

   = 1,200 units

Sales dollars to break even

Units to break even = Fixed Cost ÷ Contribution margin ratio

A = $73,200 ÷  60%

   = $122,000

B =   $660,000  ÷   75%

   = $880,000

C = $3,758,400 ÷   60%

   = $6,264,000

Units to achieve target profit

Units to achieve target profit = Fixed Cost + Target Profit ÷ Contribution margin per unit

A = $73,200 + 266,760 ÷  $120

   = 2,833 units

B =   $660,000 + 3,000,000  ÷   $3,000

   = 1220 units

C = $3,758,400 + 3,132,000 ÷   $3,132

   = 2,200 units

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