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Chapter_3HWKSol

# Chapter_3HWKSol - Exercise 3-3A Contribution margin = Sales...

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Exercise 3-3A Contribution margin = Sales – Variable cost = \$10 – \$6=\$4 Contribution margin ratio = Contribution margin ÷ Sales Contribution margin ratio = \$4 ÷ \$10.00 = 40% Sales in dollars = (Fixed cost + Desired profit) ÷ Contribution margin ratio Required sales = (\$90,000 + \$30,000) ÷ .40 Sales in dollars = \$300,000 Sales in units = \$300,000 ÷ \$10.00 = 30,000 Units Exercise 3-7A a. Sales price per unit \$200 Variable cost per unit (110) Contribution margin per unit \$90 b. Break-even in units = Fixed cost ÷ Contribution margin Break-even in units = \$630,000 ÷ \$90 Break-even in units = 7,000 c. Required sales in units = (Fixed cost + Profit) ÷ Contribution margin Required sales in units = (\$630,000 + \$270,000) ÷ \$90 Required sales in units = 10,000 Exercise 3-16A a. Weighted-average contribution margin Product Panorama \$40 x .75 = \$ 30 Product Vista \$60 x .25 = 15 Weighted-average contribution margin = \$45 Break-even = Fixed cost ÷ Weighted-average contribution margin Break-even = \$90,000 ÷ \$45 = 2,000 units b. Product Panorama = 2,000 units x .75 = 1,500 units Product Vista = 2,000 units x .25 = 500 units Problem 3-20A a. Break-even \$ = Fixed costs ÷ Contribution margin ratio

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Chapter_3HWKSol - Exercise 3-3A Contribution margin = Sales...

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