Contribution Margin Willie Company sells 30,000 units at $49 per unit. Variable

Question

Contribution Margin Willie Company sells 30,000 units at $49 per unit. Variable costs are $30.38 per unit, and fixed costs are $301,600. Determine (a) the contribution margin ratio, (b) the unit contribution margin, and (c) income from operations. a. Contribution margin ratio (Enter as a whole number.) $ b. Unit contribution margin (Round to the nearest cent.) $ c. Income from operations $ Break-Even Point Nicolas Enterprises sells a product for $78 per unit. The variable cost is $37 per unit, while fixed costs are $618,608 Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $83 per unit. a. Break-even point in sales units b. Break-even point if the selling price were increased to $83 per unit

Explanation / Answer

Question 1

Calculation of Contribution per Unit and Contribution margin ratio:

38%

[$18.62 ÷ $49] x 100

c. Calculation of income from operations:

$911,400

[30,000 x $30.38]

$301,600

Question 2

52.56%

[$41 ÷ $78] x 100

a. Break Even Point

Break Even point (In units) = [Fixed cost ÷ Contribution per unit]

= $618,608 ÷ $41

= 15,088 units

b. Break even point if sales price is increased to $83 per unit = Fixed cost ÷ cont. per unit

Contribution per unit = Sales price per unit - variable cost per unit = $83 - $37 = $46

Therefore, Break even point = $618,608 ÷ $46 = 13,448 units

a. Sale per unit $49 b. Variable Cost per Unit $30.38 c. Contibution margin per unit (a - b) $18.62 Contribution margin ratio (c/a) x 100

38%

[$18.62 ÷ $49] x 100

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.