Chapter 3 Assignment Solution

# Chapter 3 Assignment Solution - Contribution margin...

This preview shows page 1. Sign up to view the full content.

Chapter 3 Homework handed in Exercise 3-13A a. Contribution margin per unit = \$30 - \$24 = \$6 Break-even point in units = \$90,000 ÷ 6 = 15,000 Break-even point in dollars = \$30 x 15,000 = \$450,000 b. (Fixed cost + Desired profit) ÷ Contribution margin per unit = (\$90,000 + \$18,000) ÷ 6 = 18,000 units c. The new contribution margin per unit = \$29 - \$24 = \$5 (Fixed cost + Desired profit) ÷ Contribution margin per unit = (\$90,000 + \$18,000) ÷ 5 = 21,600 units Problem 3-19A a. Contribution margin = Sales price – Variable cost Contribution margin = \$32 – (\$15 + \$9) = \$8 Break-even units = Fixed cost
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Contribution margin Break-even units = \$200,000 \$8.00 Break-even units = 25,000 units Sales in dollars = 25,000 units x \$32 per unit = \$800,000 b. Required sales = (Fixed cost + Desired profit) Contribution margin Required sales = (\$200,000 + \$60,000) \$8 Required sales = 32,500 units Required sales in dollars = 32,500 x \$32 = \$1,040,000 c. Y = Fixed cost of salaries Sales = Original fixed cost + Y + Variable cost + Profit \$32 x 32,000 units = \$200,000+Y +(\$15 x 32,000)+\$60,000 \$1,024,000 \$200,000 \$480,000 \$60,000 = Y Y = \$284,000...
View Full Document

## This note was uploaded on 11/05/2008 for the course ACC U301 taught by Professor Udihoitash during the Fall '08 term at Northeastern.

Ask a homework question - tutors are online