Homework Answers
Solution a:
CM per unit = Selling price per unit - Variable cost per unit = $15 - $7 = $8 per unit
Solution b:
Contribution margin ratio = CM per unit / Selling price per unit = $8 / $15 = 53.33%
Solution c:
Break even units = Fixed costs / CM per unit = $25,000 / $8 = 3125 units
Break even sales in dollar = Fixed costs / CM ratio = $25,000 / 53.33333% = $46,875
Solution d:
Margin of safety sales = Current sales - Breakeven sales = (4500*$15) - $46,875 = $20,625
Margin of safety ratio = Margin of safety sales / current sales = $20,625 / $67,500 = 30.56%
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Sales Mix and Break-Even
Analysis
Conley Company has fixed costs of $17,802,000.
The unit selling price, variable cost per unit, and
contribution margin per unit
for the company’s two products follow:
Product Model
Selling Price
Variable Cost per Unit
Contribution Margin per Unit
Yankee
$180
$99
$81
Zoro
225
135
90
The sales mix for products Yankee and Zoro is 80% and 20%,
respectively. Determine the break-even point in
units of Yankee and Zoro.
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Megan Company has fixed costs of $1,675,000. The unit selling
price, variable cost per unit, and contribution margin per unit for
the two company's follow:
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Zhao Co. has fixed costs of $245,000. Its single product sells for $155 per unit, and variable costs are $106 per unit. If the company expects sales of 10,000 units, compute its margin of safety in dollars and as a percent of expected sales. Dollars Percent Margin of safety % US-Mobile manufactures and sells two products, tablet computers and smartphones, in the ratio of 4:2. Fixed costs are $90,860, and the contribution margin per composite unit is $118. What number...
Exercise 1. Fantasy Corporation manufactures a single product. The selling price is $125 per unit, and variable costs amount to $81 per unit. The fixed costs are $28,500 per month. (a) What is the contribution margin per unit $_ per unit (b) What is the contribution margin ratio? _% (Rounded to 1 decimal place) (c) What is the monthly sales volume (in dollars) at the break-even point? $_ (d) How many units must be sold each month to earn a...
Zachary Company makes a product that sells for $30 per unit. The company pays $11 per unit for the variable costs of the product and Incurs annual fixed costs of $165,300. Zachary expects to sell 22,100 units of product Required Determine Zachary's margin of safety expressed as a percentage. (Round your answer to 2 decimal places. (.e, 0.2345 should be entered as 23.45) Margin of safety % Reld Company is considering the production of a new product. The expected variable...
Sales Mix and Break-Even
Analysis
Conley Company has fixed costs of $17,802,000.
The unit selling price, variable cost per unit, and
contribution margin per unit
for the company’s two products follow:
Product Model
Selling Price
Variable Cost per Unit
Contribution Margin per Unit
Yankee
$180
$99
$81
Zoro
225
135
90
The sales mix for products Yankee and Zoro is 80% and 20%,
respectively. Determine the break-even point in
units of Yankee and Zoro.
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