Solution Brief Exercise 145 Contribution margin ratio 100 375 625 625x 46875 0

# Solution brief exercise 145 contribution margin ratio

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Solution Brief Exercise 145 Contribution margin ratio = 100% - 37.5% = 62.5%.625x – \$46,875 = 0X = \$75,000 of sales dollars5-26
Cost–Volume–Profit Brief Exercise 146Deighan Company had the following income statement:Sales revenue (800 units)\$80,000Cost of goods sold -fixed 20,000Cost of goods sold -variable 18,500Operating expenses - fixed12,000Operating expenses - variable13,500Net income \$16,000How much is Deighan's contribution margin?Solution Brief Exercise 146Sales – variable costs = contribution margin\$80,000 - \$18,500 - \$13,500 = \$48,000Brief Exercise 147The following monthly data are available for Marketplace, Inc. which produces only one product which it sells for \$18 each. Its unit variable costs are \$8, and its total fixed expenses are, \$15,000. Actual sales for the month of May totaled, 2,000 units. How much is the margin of safety for the company for May? Solution Brief Exercise 147BEP in units: \$18 x - \$8 x – \$15,000 = 0BEP in units = 1,500 unitsUnits at current sales level = 2,000Margin of safety = (2,000 - 1,500) x \$18 = \$9,000Sales can drop by \$9,000 before the company incurs a lossBrief Exercise 148At break even point a company sells 1,200 widgets. Its selling price is \$6 per widget, variable cost is \$2 per widget, and its fixed cost is \$4 per widget. If it sells 100 additional widgets, how much is incremental profit? Solution Brief Exercise 148\$6(1,200) - \$2(1,200) – x = 0Total fixed costs = \$4,800Incremental profit = 100 x (\$6 - \$2) = \$4005-27
Test Bankfor Managerial Accounting, Third EditionBrief Exercise 149Sam Company makes 2 products, footballs and baseballs. Additional information follows:FootballsBaseballsUnits 4,0002,500Sales\$60,000 \$25,000 Variable costs36,0007,000Fixed costs9,0009,000Net income\$15,000 \$9,000 Profit per unit\$3.75 \$3.60 If Sam has unlimited demand for both products, which product should Sam tell his sales people to emphasize? Solution Brief Exercise 149Contribution margin per unit:Footballs = [\$60,000 - \$36,000]/4,000 = \$6Baseballs = [\$25,000 - \$7,000]/2,500 = \$7.20Sam should tell sales people to sell more baseballs due to the higher contribution margin per unit.Brief Exercise 150Snara Company accumulates the following data concerning a mixed cost, using miles as the activity level.Miles DrivenTotal CostMiles DrivenTotal CostJanuary10,000\$15,000March9,000\$12,500February8,000\$14,500April7,500\$13,000Compute the variable and fixed cost elements using the high-low method.Solution Brief Exercise 150\$15,000 − \$13,000=\$0.80 = variable costper mile10,000 − 7,500\$0.80 (10,000) + FC = \$15,000 Fixed cost = \$7,000Or\$0.80 (7,500) + FC = \$13,000 Fixed cost = \$7,0005-28
Cost–Volume–Profit Brief Exercise 151Determine the missing amounts.Unit Selling PriceUnit Variable CostsContribution Margin per UnitContribution Margin Ratio1.\$300\$200A.B.2.\$600C.\$100D.3.E.F.\$40040%Solution Brief Exercise 151A.\$300 - \$200 = \$100B.\$100/\$300 = 33.3%C.\$600 – \$100 = \$500D.\$100/\$600 = 16.7%E.\$400/40% = \$1,000F.If 40% = CM ratio, then 60% = variable cost percentage; \$1,000 x 60% = \$600Or \$1,000 - \$00 = \$600Brief Exercise 152Kettle Goods Company has a unit selling price of \$500, variable cost per unit \$300, and fixed costs of \$170,000. Compute the break-even point in units and in sales dollars.

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