A) | Contribution margin per unit = Sales price - variable cost | ||
=$200- ($200*0.35) | |||
=$200-70 | |||
=$130 | |||
Increase in net income would be | |||
Increase in contribution | $ 16,900 | ||
(130 units $*130) | |||
Less: | |||
Additional Expenses | $ 6,000 | ||
Increase Net Income | $ 10,900 | ||
B) | |||
Company's Present Profit | |||
Sales | $ 11,80,000 | ||
($200*5900) | |||
Less: | |||
Variable cost | $ 4,13,000 | ||
($5900*$70) | |||
Contribution Margin | $ 7,67,000 | ||
Less: | |||
Fixed cost | $ 4,49,000 | ||
Net profit | $ 3,18,000 | ||
Profit If quality control steps taken | |||
Sales | $ 13,10,000 | ||
($200*6550) | |||
Less: | |||
Variable cost | $ 5,10,900 | ||
($6550*$78) | |||
Contribution Margin | $ 7,99,100 | ||
Less: | |||
Fixed cost | $ 4,49,000 | ||
Net profit | $ 3,50,100 | ||
Increase in profit = $350100-318000 | |||
=32100 | |||
C) | Company's Present Profit | ||
Sales | $ 11,80,000 | ||
($200*5900) | |||
Less: | |||
Variable cost | $ 4,13,000 | ||
($5900*$70) | |||
Contribution Margin | $ 7,67,000 | ||
Less: | |||
Fixed cost | $ 4,49,000 | ||
Net profit | $ 3,18,000 | ||
Sales | $ 12,12,000 | ||
($200*6060) | |||
Less: | |||
Variable cost | $ 4,60,560 | ||
(6060*$76) | |||
Contribution Margin | $ 7,51,440 | ||
Less: | |||
Fixed cost | $ 4,21,000 | ||
Net profit | $ 3,30,440 | ||
Increase in profit = $330440 -318000 | |||
=12440 | |||
Question 30 Not yet answered Points out of 3.0 P Flag question The sole product of...
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