please help me solve problem For each of the following independent situations ca

Question

please help me solve problem

For each of the following independent situations calculate the amount(o) required Required 1. At the break-even point, Jefferson Company sells 125,000 units and has fixed cost of S352.700. The variable cost per unit is S0.30·What price does Jefferson charge per unit? Note: Round to the nearest cent. 2. Sooner Industries charges a price of $105 and has foxed coet of $490,500, Next yeaf, Sooner expects to sell 12,200 units and make operating income of $187,000, What is the variable cost per unt? What is the contmibution margin ratio? Note: Round your variable cost per unit answe to the nearest cent. Enter the contribution margin ratio as a percentage, rounded to two deaimal places. Vanable cost per unit Contribution margin ratio 3. Last year, asper Company eamed apera ng income o 19 280 ith a contribution margin ratio of 02. Actual revenue was $241,000 Calculate the total fixed o st. M te: Round your answer to the nearest dollar, if required. Laramie Company has variable cost ratio of 0.25. The fixed cost is $100,310 and 23,000 units are sold at break-even. What is the price? what is the variable cost per unit? The contribution margin per unit? Node: Round answers to the nearest cent. Variable cost per unit Contribution margin per unit

Explanation / Answer

Solution:

1)

Break Even Point is the point where the contribution margin and fixed costs are equal.

At break-even point total costs (fixed + variable) and sales revenue are equal.

$$

Per Unit Fixed Cost

($352,700 / 125,000 Units)

$2.82

Per Unit Variable Cost

$0.30

Charge Per Unit

$3.12

Hence, the Jefferson does charge the price per unit = $3.12

2)

Variable Cost Per Unit

$$

Sales Revenue (105*12200)

$1,281,000

Variable Cost (1281000 - 677500)

$603,500

Contribution Margin (187000 + 490500)

$677,500

Fixed Costs

$490,500

Operating Income

$187,000

Variable Cost per unit = Total Variable Cost 603,500 / Number of Units 12,200 = $49.50 per unit (rounded to nearest cent)

Contribution Margin Ratio = Contribution Margin 677,500 / Sales Revenue 1281,000 x 100

= 52.89%

Or

Contribution Margin Ratio = Contribution Margin (Selling Price 105 – Variable Cost per unit 49.5) / Selling Price 105 x 100 = 52.86%

3)

Total Fixed Costs = Contribution Margin – Net Operating Income

Contribution Margin = Sales Revenue $241,000 * Contribution Margin Ratio 0.2 = $48,200

Net Operating Income = $19,280

Total Fixed Costs = Contribution Margin $48,200 – Net Operating Income $19,280

= $28,920

4)

As we know at break even point, contribution margin is equal to the fixed costs.

Hence, Per Unit Fixed Cost will be the Contribution Margin Per unit at break even point.

Per Unit Fixed Cost or Per Unit Contribution Margin = Total Fixed Cost 100,310 / 23,000

= $4.4 per unit (rounded to nearest cent)

Price (3.30 + 4.40)

$7.70

Variable Cost per Unit (4.40*(1 – 0.25))

$3.30

Contribution Margin Per Unit

$4.40

Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you

$$

Per Unit Fixed Cost

($352,700 / 125,000 Units)

$2.82

Per Unit Variable Cost

$0.30

Charge Per Unit

$3.12

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