Compute the missing amounts for the following table EEB (Click the icon to view

Question

Compute the missing amounts for the following table EEB (Click the icon to view the table.) Compute the missing amounts. (Enter the contribution margin ratio to nearest percent, X%.) 4,900 $ 5,660 4,528 1,584,800 1,324,440 Sale price per unit Variable costs per unit Total fixed costs Target proft Calculate Contribution margin per unit Contribution margin ratio Required units to break even Required sales dollars to break even Required units to achieve target profit 1,200 $ 900 81,000 261,000 2,940 1,097,600 24,892,000

Explanation / Answer

A($) B($) C($) Contribution margin per unit : Sales p.u - Variable costs p.u 1,200 - 900 = 300 4,900 - 2,940 = 1,960 5,660 - 4,528 = 1,132 Contribution margin ratio = (Contribution margin p.u /  Sales p.u ) *100 (300 /1,200) *100 = 25 % (1,960 / 4,900) *100 = 40 % (1,132 / 5,660) *100 = 20 % Required units to break even : (Total fixed costs / Contribution margin p.u ) (81,000 / 300) = 270 units (1,097,600 / 1,960) = 560 units (1,584,800/ 1,132) = 1,400 units Required sales dollars to break even : (Total fixed costs / Contribution margin (81,000 / 25 %) = $234,000 (1,097,600 / 40 %) = $2,744,000 (1,584,800 / 20%) = $7,924,000 Required units to achieve target profit : (Total fixed costs + Target profit) / Contribution margin  p.u (81,000 + 261,000) / 300 = 1,140 units (1,097,600 + 24,892,000) / 1,960= 13,260 units (1,584,800+ 1.324,440 / 1,132) = 2,570 units

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