Homework Answers
| Answer | |||||
| 1 | Contribution Margin = Sales - Variable Cost / Sales *100 | ||||
| Particulars | Breakfast | Lunch | Dinner | Total | |
| Sales Qty | 8000 | 4000 | 2000 | ||
| Sales price per unit | $ 5.00 | $ 8.00 | $ 12.00 | $ 25.00 | |
| Sales Value | $ 40,000.00 | $ 32,000.00 | $ 24,000.00 | $ 96,000.00 | |
| Less: Variable Cost | |||||
| Variable cost per unit | $ 2.50 | $ 3.00 | $ 6.00 | $ 11.50 | |
| Variable Cost | $ 20,000.00 | $ 12,000.00 | $ 12,000.00 | $ 44,000.00 | |
| Contribution = Sales - Variable Cost | $ 20,000.00 | $ 20,000.00 | $ 12,000.00 | $ 52,000.00 | |
| Contribution Margin = | 20000/40000*100 | 20000/32000*100 | 12000/24000*100 | ||
| Contribution Margin = | 50% | 63% | 50% | 54% | |
| 2 | Contribution | $ 20,000.00 | $ 20,000.00 | $ 12,000.00 | $ 52,000.00 |
| Less: Fixed Cost | 25,000.00 | ||||
| Operating Profit | $ 27,000.00 | ||||
| 3 | Production & Selling only half | ||||
| Sales Qty | 4000 | 2000 | 1000 | 0 | |
| Sales price per unit | $ 5.00 | $ 8.00 | $ 12.00 | ||
| Sales Value | $ 20,000.00 | $ 16,000.00 | $ 12,000.00 | $ 48,000.00 | |
| Less Variable Cost | |||||
| Variable cost per unit | $ 2.50 | $ 3.00 | $ 6.00 | ||
| Variable Cost | $ 10,000.00 | $ 6,000.00 | $ 6,000.00 | $ 22,000.00 | |
| Contribution | $ 10,000.00 | $ 10,000.00 | $ 6,000.00 | $ 26,000.00 | |
| Less: Fixed Cost | 25,000.00 | ||||
| Operating Profit | $ 1,000.00 | ||||
| 4 | Tie point | ||||
| in Units = Fixed Cost / Contribution per unit | |||||
| Contribution per unit= | |||||
| Sales price per unit | $ 5.00 | $ 8.00 | $ 12.00 | $ 25.00 | |
| Variable cost per unit | $ 2.50 | $ 3.00 | $ 6.00 | $ 11.50 | |
| Contribution per unit= | $ 13.50 | ||||
| in Units = Fixed Cost / Contribution per unit | 25000/13.5 | ||||
| 1,851.85 | |||||
| Tie point | |||||
| in Dollars = Fixed Cost / Contribution margin | |||||
| Fixed Cost | 25,000.00 | ||||
| Contribution Margin = | 50% | 63% | 50% | 54% | |
| in Dollars = Fixed Cost / Contribution margin | 46,153.85 | ||||
| 5 | Sales Qty | 2000 | 4000 | 8000 | |
| Sales price per unit | $ 5.00 | $ 8.00 | $ 12.00 | $ 25.00 | |
| Sales Value | $ 10,000.00 | $ 32,000.00 | $ 96,000.00 | $ 138,000.00 | |
| Less: Variable Cost | |||||
| Variable cost per unit | $ 2.50 | $ 3.00 | $ 6.00 | $ 11.50 | |
| Variable Cost | $ 5,000.00 | $ 12,000.00 | $ 48,000.00 | $ 65,000.00 | |
| Contribution | $ 5,000.00 | $ 20,000.00 | $ 48,000.00 | $ 73,000.00 | |
| Tie point | |||||
| in Units = Fixed Cost / Contribution per unit | |||||
| Contribution per unit= | $ 13.50 | ||||
| Tie point in units | $ 1,851.85 | ||||
| in Dollars = Fixed Cost / Contribution margin | |||||
| Contribution Margin = | 53% | ||||
| Tie point in Dollars | $ 47,260.27 | ||||
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