Ch 16 Online Review.xlsx - Chapter 15 Problem 1 Price unit Variable cost unit Fixed costs 80 25 25,000 1 What is the contribution margin 55 2 What is

# Ch 16 Online Review.xlsx - Chapter 15 Problem 1 Price unit...

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Chapter 15 Problem 1 Price / unit 80 Variable cost / unit 25 Fixed costs 25,000 1. What is the contribution margin? 55 2. What is the contribution margin percentage? 0.6875 3. What is the variable margin percentage? 0.3125 4. How many UNITS does this company need to sell to Break-even? 454.55 5. How much in sales (revenues) does this company need to make a \$50,000 profit? 6. How much would profit change (compared to the \$50,000 profit in question 5) if Contributi margin increases by 20% and fixed costs increase by 10%? (note: this question covers a lot of the Ch 15 concepts to see if you really understand them 7. Prepare a contribution margin income statement for the scenario in question 5 above (the 8. Is a contribution margin income statement OK under GAAP? 5 109090.90909
109090.909090909 tion m all) e \$50,000 profit)
Chapter 15 Problem 1 - Answers Price / unit 80 Variable cost / unit 25 Fixed costs 25,000 Answer: 1. What is the contribution margin? CM = price-variable cost \$ 55 per unit 2. What is the contribution margin percentage? CM% = CM / Price 69% 3. What is the variable cost percentage?

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