Solution:
Computation of contribution margin per unit - Burchard Company | ||
Plan 1 | Plan 2 | |
Selling price per unit | $18.00 | $23.40 |
Variable cost per unit: | ||
Direct material ($5 * 30%) | $1.50 | $1.50 |
Direct labor ($4 * 70%) | $2.80 | $2.80 |
Variable overhead cost | $0.50 | $0.50 |
Variable selling and administrative costs | $0.30 | $0.30 |
Total variable cost per unit | $5.10 | $5.10 |
Contribution margin per unit | $12.90 | $18.30 |
Plan 1 | ||||
Contribution Margin ratio | ||||
Choose Numerator | / | Choose Denominator | = | Contribution Margin ratio |
Contribution Margin | Sale Price | Contribution Margin ratio | ||
$12.90 | $18.00 | 71.67% | ||
Break Even point in dollar | ||||
Choose Numerator | / | Choose Denominator | = | Break Even point in dollars |
Fixed Costs | Contribution Margin ratio | Break Even point in dollars | ||
320000 | 71.67% | 446512 | ||
Plan 2 | ||||
Contribution Margin ratio | ||||
Choose Numerator | / | Choose Denominator | = | Contribution Margin ratio |
Contribution Margin | Sale Price | Contribution Margin ratio | ||
$18.30 | $23.40 | 78.21% | ||
Break Even point in dollar | ||||
Choose Numerator | / | Choose Denominator | = | Contribution Margin ratio |
Fixed Costs | Contribution Margin ratio | Break Even point in dollars | ||
320000 | 78.21% | 409180 |
Required information [The following information applies to the questions displayed below.] This year Burchard Company sold...
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Required information [The following information applies to the questions displayed below.] This year Burchard Company sold 45,000 units of its only product for $18.00 per unit. Manufacturing and selling the product required $130,000 of fixed manufacturing costs and $190,000 of fixed selling and administrative costs. Its per unit variable costs follow. Material $ 5.00 Direct labor (paid on the basis of completed units) 4.00 Variable overhead costs 0.50 Variable selling and administrative costs 0.30 Next year the company will use...
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