Week 3 Module 3

# Week 3 Module 3 - e of operating leverage = Contribution...

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Revenue 150,000 Less: Variable Cost 79,000 Contribution Margin 71,000 Fixed Cost (Depre & Maint) 40,000 Net Income 31,000 Revenue 400,000 Less: Variable Costs 245,000 Contribution Margin 155,000 Fixed Cost 100,000 Net Income 55,000 Ratio= cont margin/revenue 155,000/400,000 = .39 Total Fixed Costs + Target Profit Contribution Margin per unit = 55000 + 0/selling price 200-variable cost 90 =55000/110 =500 units 55,000 + 0/ (200) – (67+15+5+3) = 55,000/110 =500 units is the break-even amount of printers that need to be sold per month. V F F V X Total Fixed Cost+Target profit/Contribution Margin Ratio (19x 10,000) + 0/(Selling price 90)- (Variable cost 63)/90 selling price 190,000/.3 =\$633,333 633,333 Total Fixed + Target Profit/Contribution Margin per unit =((10 + 7) x10,000) = 26,000/(Selling price 70) – (Variable costs 20+9+5+1) = 196,000/35 = 5,600 trucks must be sold per month to meet target profits. 1220 Total Fixed Cost + Target Profit/ Contribution margin Ratio = (( 17.5 + 22) x 10,000 + 400,000/(Selling price 200) – (Variable costs 60+11+13+10) = 395,000 + 400,000/ (106/200 selling price) =795,000/.53 = 1,500,000 is needed in monthly revenues to meet its target profit of 400,000 per month.

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