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Nutka1998 [239]
4 years ago
9

Given below are two independent scenarios: a. Dream Co. has budgeted sales of $500,000, fixed costs are $240,000, and variable c

osts are $375,000. What is its contribution margin ratio? Enter the percentage amount as a whole number (for example, enter 10% as "10"). % b. Pearl Company has sales of $825,000, variable costs are 30% of sales, and fixed costs are $360,000. What is its operating profit? $
Business
1 answer:
garri49 [273]4 years ago
6 0

Answer:

a.  25

b. $217,500

Explanation:

Contribution Margin Ratio = Contribution / Sales × 100

                                            = ($500,000 - $375,000) / $500,000 × 100

                                            = 25.00% or 25

Income statement for Pearl Company

Sales                        $825,000

<em>Less</em> Variable Cost ($247,500)

Contribution            $577,500

Less Fixed Costs    ($360,000)

Operating Profit       $217,500

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matrenka [14]

Answer:

Sell before assembly, the company will be better off by $3 per unit

Explanation:

the aim of a firm is to maximise profit. The decision the firm would make would be based on the decision that yields the higher profit

Profit = revenue - cost

Profit that would be earned from selling the unassembled unit = $52 - $24 = $28

Profit that would be earned from selling the assembled unit = $64 - ($15 + $24) = 25

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3 years ago
Custom Cabinets spends its product research dollars as follows: 32% goes to improving existing products, 28% to creating new pro
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Answer:

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3 years ago
Under absorption costing, a company had the following unit costs when 9,000 units were produced. Direct labor $ 7.25 per unit Di
tekilochka [14]

Answer:

$23.45 per unit

Explanation:

Given that,

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