ATG212Chapter6Solutions - Brief Exercise 6-6(15 minutes 1...

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Brief Exercise 6-6  (15 minutes) 1. The equation method yields the required unit sales, Q, as follows: Sales = Variable expenses + Fixed expenses + Profits $140Q = $60Q + $40,000 + $6,000 $80Q = $46,000 Q = $46,000  ÷  $80 per unit Q = 575 units 2. The contribution margin yields the required unit sales as follows: Fixed expenses +  Target profit Units sold to attain   =   the target profit Unit contribution margin $40,000 + $8,000 =   $80 per unit $48,000 =   $80 per unit =  600 units
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Brief Exercise 6-9  (30 minutes) 1. The overall contribution margin ratio can be computed as follows: Total contribution margin Overall CM ratio =   Total sales $120,000 =    =  80% $150,000 2. The overall break-even point in sales dollars can be computed as  follows: Total fixed expenses Overall break-even =   Overall CM ratio $90,000   =   =  $112,500 80% 3. To construct the required income statement, we must first  determine the relative sales mix for the two products: Predator
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  • Spring '09
  • Dascher
  • $7           3 10, $18    190,000, $75,000    18,750, 15 322,000      %, 30 30,000      %, 40     42,000           $

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