Answer 1.
Contribution Margin per unit = Selling Price per unit - Variable
Cost per unit
Contribution Margin per unit = $25.00 - $15.00
Contribution Margin per unit = $10.00
Contribution Margin Ratio = Contribution Margin per unit /
Selling Price per unit
Contribution Margin Ratio = $10.00 / $25.00
Contribution Margin Ratio = 40%
Breakeven Point in balls = Fixed Expenses / Contribution Margin
per unit
Breakeven Point in balls = $374,000 / $10.00
Breakeven Point in balls = 37,400
Degree of Operating Leverage = Contribution Margin / Net
Operating Income
Degree of Operating Leverage = $580,000 / $206,000
Degree of Operating Leverage = 2.82
Answer 2.
Selling Price per unit = $25.00
Variable Cost per unit = $15.00 + $3.00
Variable Cost per unit = $18.00
Fixed Expenses = $374,000
Contribution Margin per unit = Selling Price per unit - Variable
Cost per unit
Contribution Margin per unit = $25.00 - $18.00
Contribution Margin per unit = $7.00
Contribution Margin Ratio = Contribution Margin per unit /
Selling Price per unit
Contribution Margin Ratio = $7.00 / $25.00
Contribution Margin Ratio = 28%
Breakeven Point in units = Fixed Expenses / Contribution Margin
per unit
Breakeven Point in units = $374,000 / $7.00
Breakeven Point in units = 53,429
Answer 3.
Contribution Margin per unit = $7.00
Fixed Expenses = $374,000
Target Profit = $206,000
Required Sales in units = (Fixed Expenses + Target Profit) /
Contribution Margin per unit
Required Sales in units = ($374,000 + $206,000) / $7.00
Required Sales in units = 82,857
Answer 4.
Variable Cost per unit = $18.00
Contribution Margin Ratio = 40%
Contribution Margin Ratio = (Selling Price per unit - Variable
Cost per unit) / Selling Price per unit
0.40 = (Selling Price per unit - $18.00) / Selling Price per
unit
0.40 * Selling Price per unit = Selling Price per unit -
$18.00
0.60 * Selling Price per unit = $18.00
Selling Price per unit = $30.00
Answer 5.
Selling Price per unit = $25.00
Variable Cost per unit = $15.00 - 40% * $15.00
Variable Cost per unit = $9.00
Fixed Expenses = $374,000 * 2
Fixed Expenses = $748,000
Contribution Margin per unit = Selling Price per unit - Variable
Cost per unit
Contribution Margin per unit = $25.00 - $9.00
Contribution Margin per unit = $16.00
Contribution Margin Ratio = Contribution Margin per unit /
Selling Price per unit
Contribution Margin Ratio = $16.00 / $25.00
Contribution Margin Ratio = 64%
Breakeven Point in balls = Fixed Expenses / Contribution Margin
per unit
Breakeven Point in balls = $748,000 / $16.00
Breakeven Point in balls = 46,750
Answer 6-a.
Contribution Margin per unit = $16.00
Fixed Expenses = $748,000
Target Profit = $206,000
Required Sales in units = (Fixed Expenses + Target Profit) /
Contribution Margin per unit
Required Sales in units = ($748,000 + $206,000) / $16.00
Required Sales in units = 59,625
Answer 6-b.
Degree of Operating Leverage = Contribution Margin / Net
Operating Income
Degree of Operating Leverage = $928,000 / $180,000
Degree of Operating Leverage = 5.16
Problem 6-20 CVP Applications: Break-Even Analysis; Cost Structure; Target Sales [LO6-1, LO6-3, LO6- 4, LO6-5, LO6-6,...
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Help 10 Problem 6-20 CVP Applications: Break-Even Analysis; Cost Structure; Target Sales (LO6-1, LO6-3, LO6 4. L06-5, L06-6, LO6-8) 0.83 points Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high totaling $15.00 per ball, of which 60% is direct labor cost Last year, the company sold 44,000 of these balls with the following results...
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All help is appreciated. Thanks for your time! Problem 5-20 CVP Applications: Break-Even Analysis; Cost Structure: Target Sales (LO5-1, LO5-3, L05-4, LO5-5, LO5-6, LO5-8] Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, Variable expenses are high, totaling $15.00 per ball of which 60 direct labor cost Last year, the company sold 42,000 of these balls, with the...
please slove all the questions. thank you! Seved Help Problem 5-20 CVP Applications: Break-Even Analysis; Cost Structure; Target Sales (LO5-1, LO5-3, LOS- 4, LO5-5, LO5-6, LO5-8) Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost Last year, the company sold 50,000 of these...