CH6HWex - Homework Ch 6(BE 1,4-10 E11-18 BE 6-1 1 Number of...

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Homework: Ch 6 (BE 1,4-10; E11-18) BE 6-1 1) 2) Number of Units Per Unit Number of Units 10100 9900 Sales 353500 $35.00 Sales 346500 Variable Expenses 202000 $20.00 Variable Expenses 198000 Contribution Margin 151500 $15.00 Contribution Margin 148500 Fixed Expenses 135000 Fixed Expenses 135000 Net Operating Income 16500 Net Operating Income 13500 BE 6-4 1) Number of Units Per Unit 59999 Sales 200000 $14.00 Variable Expenses 120000 $2.40 Contribution Margin 80000 11.6 Fixed Expenses 65000 80000/20000=40% Net Operating Income 15000 2) Change in total sales: $1000 x 40% = $400 BE 6-5 1) Per Unit Percent of Sales
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Selling Price $90 100% Variable Expenses $63 70% Contribution Margin $27 30% CM Ratio = $27 / $90 = .3 Change in net income: $2300 BE 6-6 1) 2) Unit sales to earn a target profit of $10,000: Unit sales to earn a target profit of $15,000: Unit CM = 120 - 80 = 40 Unit CM = 120 - 80 = 40 $10,000 = $40 x Q - $50,000 ($15,000 + $50,000) / $40 = 1625 $40 x Q = $10,000 + $50,000 Q = ($10,000 + $50,000) / $40 Q = 1,500 BE 6-7 1) 2) 3) Break-even point in sales: Dollar sales to break-even: Break-even point Unit CM = 15 - 12 = 3 CM ratio = .80 Unit CM = 15 - 12 $4200 / $3 = 1,400 $4200 / .80 = $5250 $4200 / $3 = 1,40 BE 6-8 1) Margin of safety: Sales 30000 Break-even sales 11194
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Margin of safety in dollars 18805 Break-even sales: 7500 / .67 = 11,194 2) Margin of safety % 63%
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