problems3and4

problems3and4 - (80) Contribution margin $320* 15,000=...

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3) Break-Even Point in Units= Fixed Costs _ Contribution margin per unit Cost Structure A = $3,520,000 _ $320 per unit = 11,000 units Cost Structure B = $1,684,000 _ $218 per unit = 7,725 units Break-Even Point in Dollars= Break-Even Point in Units x Selling Price Cost Structure A = 11,000 units x $400 = $4,400,000 Cost Structure B = 7,725 units x $400 = $3,090,000 4) Operating leverage= contribution margin Net income Cost structure A: Selling price: 400 Variable costs:
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Unformatted text preview: (80) Contribution margin $320* 15,000= 4,800,000 Net income= ($400* 15,000 units)-(4,800,000)-(3520000) Net income= Operating leverage= VARIABLE COST PER UNIT (a) 80 182 Sales Revenue (400)*(15,000)= 6000000 (400*15,000) = 6000000 Variable cost (15,000*a) (1200000) (2730000) Contribution margin 4800000 3270000 Fixed costs (3,520,000) (1,684,000) Net income 1,280,000 1586000 Operating leverage 3.75 2.06...
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This note was uploaded on 04/02/2008 for the course GB 203 taught by Professor Montissino during the Fall '07 term at Bentley.

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