BA511-L4A2 - Student Name: Class: MEMOFAX, INC. 1....

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Student Name: Class: MEMOFAX, INC. 1. Contribution margin ratio: Percent Total Per Unit of Sales Sales $270,000 $20 100% Variable expenses 189,000 14 70% Contribution margin $81,000 $6 30% Break-even point: Sales $300,000 Sales = Variable expen Variable expense 210,000 20x = 14x + 90000 + 0 Fixed expense 90,000 15000 Profits 0 Break-even point (units) 15,000 Correct! Break-even point (dollars) $300,000 Correct! Alternative break-even point calculation: Break-even point (units) 15,000 Correct! Units sold = fixed expen Break-even point (dollars) $300,000 Correct! 2. Incremental contribution margin: Increased sales $70,000 Net Income = sales/con Less increase advertising cost 8,000 $21,000 Increase in monthly net income $13,000 Correct! Current loss per month ($9,000) Add increase 13,000 Total income per month $4,000 3. Sales $486,000 Per unit = 18 Variable expenses 378,000 13500 27000 Contribution margin 108,000 Fixed expenses 125,000 Net loss ($17,000) Correct! 4.
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This note was uploaded on 06/14/2010 for the course BA ADF1 taught by Professor Russell during the Winter '09 term at Antelope Valley College.

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BA511-L4A2 - Student Name: Class: MEMOFAX, INC. 1....

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