Ch7 Problem 7-50

# Ch7 Problem 7-50 - 7-50(45 MINUTES 1 Unit contribution...

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7-50 (45 MINUTES) 1. tonnes 1,100 \$450 \$495,000 margin on contributi unit costs fixed in tonnes e even volum - Break per tonne \$450 1,800 \$810,000 margin on contributi Unit = = = = = 2. Projected net income for sales of 2,100 tonnes: Projected contribution margin (2,100 × \$450) ...................................... \$945,000 Projected fixed costs ............................................................................... 495,000 Projected net income ............................................................................... \$450,000 3. Projected net income including foreign order: Variable cost per tonne = \$990,000/1,800 = \$550 per tonne Sales price per tonne for regular orders = \$1,800,000/1,800 = \$1,000 per tonne Foreign Order Regular Sales Sales in tonnes ................................................................. 1,500 1,500 Contribution margin per tonne: Foreign order (\$900 – \$550) ....................................... × \$350 Regular sales (\$1,000 – \$550) .................................... × \$450 Total contribution margin ................................................ \$525,000 \$675,000 Contribution margin on foreign order ....................................................... \$ 525,000 Contribution margin on Regular sales ......................................................

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