Ch. 7 solutions - BUSI0027 MAI Solutions to Ch.7 assigned...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
BUSI0027 MAI Solutions to Ch.7 assigned questions E7-35 1. Sales price per unit. ............................................ $20.00 Variable cost per unit. ........................................ $15.00 Contribution margin per unit. ............................ $ 5.00 Contribution margin ratio = $5.00 = .25 $20.00 = 25% Sales Revenue (120,000 × $20.00)……………… $ 240,000 Less: Variable expenses (120,000 × $15.00)… <1,800,000 > Contribution margin……………………………. . $ 600,000 2. Sales volume (units)……………………………… 150,000 Unit contribution margin………………………… x $5.00 Contribution margin……………………………… $750,000 Less: Fixed expenses…………………………… <468,000 > Operating income…………………………………. $282,000 3. Sales revenue……………………………………… $4,000,000 Contribution margin ratio………………………. . x 25 % Contribution margin……………………………… $1,000,000 Less: fixed expenses……………………………. <468,000 > Operating income…………………………………. $ 532,000 4. Sales in units = $468,000 = 93,600 $5.00 units Sales in dollars = $468,000 = $1,872,000 25% 5. $468,000 + $260,000 = 145,600 units $5.00
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
6. Original contribution margin per unit. ................. $5.00 Less: Increase in Direct labor cost per unit ($5.00 x 10%). ......................................................... $0.50 New contribution margin per unit………………. .. $4.50 Original fixed expenses……………………………. $468,000 Plus: Increase in fixed expenses………………. . 22,500 New fixed expenses………………………………… $490,500 New breakeven in units = $490,500 = 109,000 $4.50 Units 7. Contribution margin (from part 1)………………. .. $600,000
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/15/2009 for the course ACCOUNTING BUSI0027 taught by Professor Guan during the Spring '09 term at HKU.

Page1 / 7

Ch. 7 solutions - BUSI0027 MAI Solutions to Ch.7 assigned...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online