Homework Answers
1.
Contribution margin per unit = (Sales - Variable expenses) / units
= ($80,000 - $52,000) / 1,000 units
= $28,000 / 1,000
= $28
2.
Contribution margin ratio = Contribution margin per unit / Selling price per unit
= $28 / $80
= 35%
4.
| Sales (1,001 * $80) | $80,080 |
| (-) Variable expenses (1,001 * $52) | $52,052 |
| Contribution margin | $28,028 |
| (-) Fixed Expenses | $21,840 |
| Net operating income | $6,188 |
Net operating income by $28 ($6,160 - $6,188)
6.
| Sales (900 units * $82) | $73,800 |
| (-) Variable expenses (900 units * $52) | $46,800 |
| Contribution margin | $27,000 |
| (-) Fixed Expenses | $21,840 |
| Net operating income | $5,160 |
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