Question 3: Selve the following independent problems (7 marks) costs are as Nort

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Question 3: Selve the following independent problems (7 marks) costs are as Northensold Company sells several products Information of average revenue and S20.00 Selling price per unit Variable costs per unit $4.00 $1.60 S0.40 $2.00 $96,000 Direct material Direct manufacturing labor Selling costs Annual fixed costs (a) The contribution margin per unit is (b) The number of units that Northenscold's must sell each year to break even is (c) The number of units that Northenscold's must sell annually to make a profit of $144,000 is

Explanation / Answer

Answer

* All working forms part of the answer

* Requirement 'a'

* Requirement 'b'

* Requirement 'c'

A Selling Price per unit $                                     20.00 Variable cost per unit: B Direct material $                                        4.00 C Direct manufacturing labor $                                        1.60 D Manufacturing Overhead $                                        0.40 E Selling cost $                                        2.00 F = B+C+D+E Total Variable cost $                                        8.00 G = A - F Contribution margin per unit $                                     12.00

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