Team promlem set 1

# Team promlem set 1 - Team A (Christ, Kat, Lien, Mike,...

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Team A (Christ, Kat, Lien, Mike, Sophia) Team exercise set 1 1 . Wildwood Corporation: a) Contribution margin unit =17.55 Unit sales price-unit variable costs=68.50-50.95=17.55 b) Contribution margin ration=25% Contribution margin ration=contribution margin/selling price (unit)=17.55/68.50=25% c) Break-even point in units = 28490 units Break-even point=fixed costs/contribution margin (units)=\$500000/17.55=28490.0 d) Break even volume in dollars=\$1,951.565.00 Break even volume = units x selling price per unit = 28490x\$68.50 = \$1951566.00 total to break even 2. Love Company a. Compute the break-even point in units Per Unit Selling price \$6.60 Variable cost \$5.28 Unit Contribution margin \$1.32 The number of units that we must sell to break even \$46,200.00 / \$1.32 = 35,000.00 units

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b. Compute that sales volume necessary to produce an after-tax net income of \$13,028.40 Variable-cost ratio = \$5.28/\$6.6 = 0.8 Income before-tax: \$13,028.40 / (1- 0.3) = \$18,612.00 Let S = sales volume. Then S – 0.8S - \$46,200.00 = \$18,612.00
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## Team promlem set 1 - Team A (Christ, Kat, Lien, Mike,...

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