ATG212Chapter6Solutions

# 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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