CanyonCompan Rossings Company Beginning finished goods inventory $ 9,000 $ 23,00

Question

CanyonCompan Rossings Company
Beginning finished goods inventory $ 9,000 $ 23,000
Beginning goods in process inventory 22,000 22,500
Beginning raw materials inventory 10,000 13,000
Rental cost on factory equipment 31,000 26,000
Direct labor 20,000 40,000
Ending finished goods inventory 16,500 13,500
Ending goods in process inventory 28,000 18,000
Ending raw materials inventory 6,500 10,400
Factory utilities 13,000 18,000
Factory supplies used 13,800 3,900
General and administrative expenses 18,000 48,000
Indirect labor 3,250 9,660
Repairs

Explanation / Answer

follow thisTarget Sales Volume (in dollars) = Fixed Costs + Target Operating Income 10. Contribution Margin Ratio = $145,000 + $30,000 .35 = $500,000 per month 11. At the break-even point, a company earns a total contribution margin exactly equal to its fixed costs. By dividing the unit contribution margin into this required total contribution margin, we can determine the number of units that must be sold to enable the company to cover its fixed costs. 12. If the contribution margin ratio is 35%, variable costs must account for the other 65% of total revenue. If 65% of total revenue is equal to $26 per unit, the unit sales price must be $26

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