Chapter 9

# Chapter 9 - Name Nguyen Thi Lan Thanh Class Tuesday...

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Name: Nguyen Thi Lan Thanh Class: Tuesday Afternoon ID: 1236311 CHAPTER 9 9 / Total variable cost = \$50,000 + \$37,500 + \$75,000 = \$162,500 a) The variable production cost per unit is: \$162,500 : 150,000 = \$1.083 b) CM = Revenue – (COGS + Selling and administrative) = \$240,000 – \$162,500 = \$77,500 The total contribution margin per unit is: \$77,500 : 90,000 = \$0.86 c) A variable costing statement: COGS = \$1.083 x 90,000 = \$97,470 FC = FOH + Selling and administrative = \$56,250 + \$50,000 = 106,250 Sales \$240,000 Less variable costs: Cost of goods sold \$97,470 Selling and administration \$45,000 Total variable cost \$142,470 Contribution margin \$ 97,530 Less fixed expenses: Manufacturing overhead \$56,250 Selling and administration \$50,000 Total fixed cost \$106,250 Net income (loss) \$ 8,720 10 / Total revenue, Total cost, Income before tax increase when product volume goes up by one unit at Leroy’s Axles. 11 / a) Contribution margin per unit = \$30 -\$15 = \$15 The break-even point in units is: X = Fixed cost : Contribution margin per unit = \$60,000 : \$15 = 4,000 in units

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b) Contribution margin ratio = Contribution margin per unit : Revenue = \$15 : \$30 =0.5 or 50% The break-even point in dollar is: X = Fixed cost : Contribution margin Ratio = \$60,000 : 0.5 = 120,000 in sales dollars 14 / Variable cost = 70% Sale Contribution margin = 30% Sale Sale = (\$300,000 + \$600,000) : (100% - 70%) = \$3,000,000 Minimum price which it must sell its product:
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## This note was uploaded on 11/23/2011 for the course MANAGEMENT 101 taught by Professor Nguyen during the Spring '11 term at Troy.

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Chapter 9 - Name Nguyen Thi Lan Thanh Class Tuesday...

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