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Current Attempt in Progress Midlands Inchadabad year in 2019. For the first time in its history it operated atas. The company
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Answer #1
Ans 1) Midland Inc.
Ratio
Amount
Sales=(A) $                              20,00,000.00 100%
Variable Expenses=(B) $                              12,00,000.00 60.00%
Contribution Margin=(C )=(A)-(B) $                                 8,00,000.00 40.00%
Fixed Expenses=(D) $                              10,10,000.00
Net Operating Income=(C )-(D) $                               -2,10,000.00
Contribution Margin=Sales-Variable Cost
Break even Point in dollars=Fixed Cost/Contribution Margin Ratio
Contribution Margin Ratio=(Contribution Margin/Sales)*100
Fixed Cost=(A) $                              10,10,000.00
Contribution Margin Ratio=(B) 40.00%
Break even Point=(A)/(B) $                              25,25,000.00
Ratio
Ans 2(a) Change selling Price($2000000*1.20) $                              24,00,000.00 100%
Variable Expenses $                              12,00,000.00 $               0.50
Contribution Margin $                              12,00,000.00 $               0.50
Fixed Cost=(A) $                              10,10,000.00
Contribution Margin Ratio=(B) $                                               0.50
Break even Point=(A)/(B) $                              20,20,000.00
b) Change in Variable cost
Variable cost (Present) $                              12,00,000.00
Add: Commission($2000000*5%) $                                 1,00,000.00
New Variable cost $                              13,00,000.00
Fixed Cost(Present) $                              10,10,000.00
Less: $                               -2,05,000.00
Add: $                                    42,000.00
New Fixed Cost $                                 8,47,000.00
Ratio
Selling Price=(A) $                              20,00,000.00 100.00%
New Variable Expenses=(B) $                              13,00,000.00 65.00%
Contribution Margin=(A)-(B) $                                 7,00,000.00 35.00%
Fixed Cost=(A) $                                 8,47,000.00
Contribution Margin Ratio=(B) 35.00%
Break even Point=(A)/(B) $                              24,20,000.00
c) Total Variable Fixed
Cost of goods sold(50:50) ratio variable and Fixed($1542000*50%) variable,($1542000*50%) Fixed $                              15,42,000.00 $ 7,71,000.00 $    7,71,000.00
Selling Expenses $                                 5,22,000.00 $     93,000.00 $    4,29,000.00
Administrative Expenses $                                 1,46,000.00 $     56,000.00 $       90,000.00
Total $                              22,10,000.00 $ 9,20,000.00 $ 12,90,000.00
Net Loss $                               -2,10,000.00
Ratio
Selling Price=(A) $                              20,00,000.00 100.00%
New Variable Expenses=(B) $                                 9,20,000.00 46.00%
Contribution Margin=(A)-(B) $                              10,80,000.00 54.00%
Fixed Cost=(A) $                              12,90,000.00
Contribution Margin Ratio=(B) 54.000%
Break even Point=(A)/(B) $                                    23,88,889
Break even Point
1) $                                    20,20,000
2) $                                    24,20,000
3) $                                    23,88,889
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