Ans. 1 | HAWK HOMES, INC. | ||
Contribution Margin Income Statement | |||
Total | |||
Sales (1,250 * $31.30) | $39,125.00 | ||
Variable expenses (1,250 * $15) | -$18,750.00 | ||
Contribution margin | $20,375.00 | ||
Fixed expenses | -$14,229.90 | ||
Net operating income | $6,145.10 | ||
Ans. 2 | On break even point, company's contribution margin is equal to its fixed | ||
cost because on the break even level of sales the operating income of | |||
company becomes zero and operating income is the difference between | |||
contribution margin and fixed cost. | |||
Contribution margin = $14,229.90 | |||
Ans. 3 | Contribution margin per unit = Selling price per unit - Variable cost per unit | ||
$31.30 - $15 | |||
$16.30 | per unit | ||
Contribution margin ratio = Contribution margin per unit / Selling price per unit * 100 | |||
$16.30 / $31.30 * 100 | |||
52.08% | |||
Ans. 4 | Break even point in unit sales = Fixed cost / Contribution margin per unit | ||
$14,229.90 / $16.30 | |||
873 units | |||
Break even point in dollar sales = Break even in units * Selling price per unit | |||
873 * $31.30 | |||
$27,324.90 | |||
Ans. 5 | Sales units for target profit = (Fixed cost + Target profit) / Contribution margin per unit | ||
($14,229.90 + $27,000) / $16.30 | |||
$41,229.90 / $16.30 | |||
2529 | units | ||
Hawk Homes, Inc., makes one type of birdhouse that It sells for $31.30 each. Its varlable...
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