Pries, Variable Cost per unit, Contribution Margin, Contribution Margin Ratio, F

Question

Pries, Variable Cost per unit, Contribution Margin, Contribution Margin Ratio, Fixed Expense for each of the following independent situations, calculate the amount(s) required. At the break-even point, Jefferson Company sells 105,000 units and has fixed cost of $351,000. The variable cost per unit is $0.3. What pries does Jefferson change per unit? Round to the nearest cent. Sooner Industries charges a price of $91 and has fixed cost of $470,500. Next year, Sooner expects to sell 13,300 units and make operating income of $183,000. What us the variable cost per unit? What is the contribution margin ratio? Round your answer to the nearest cent. Enter the contribution margin ratio as a percentage, rounded to two decimal places. Variable cost per unit Contribution margin ratio Last year, Jasper Company earned operating income of $ 24,300 with a contribution margin ratio of 0.25. Actual revenue was $243,000. Calculate the total fixed cost. Round your answer to the nearest dollar. Laramie Company has variable cost ratio of 0.55. The fixed cost is $108,020 and 21,000 units are sold at breakeven. What is the price? What is the variable cost per unit? The contribution margin per unit? (Round answers to the nearest cent) Price Variable cost per unit Contribution margin per unit

Explanation / Answer

1) Fixed Cost 351000 Variable Cost ( 105000 * 0.30) 31500 Total Cost 382500 At Break even Point , contribution = Fixed Cost Hence , contribution at BEP = 351000 Now Sales - Variable Cost -= Contribution Therefore Sales = Contribution + Variable Cost                                  = 351000 + 31500                                  = 382500 Sale price per unit = Sales / Number of units sold                                       = 382500 / 105000                                       = 3.6 2) Sales ( 13300 * 91) 1210300 Less : Variable cost x Less : Fixed Cost 470500 Operating Income 183000 556800 Hence Variable Cost = Sales - Fixed Cost - operating Income                                           = 1210300 - 470500 - 183000                                            = 556800 Variable cost per unit = Variable Cost / Number of units                                              = 556800 / 13300                                              = 41.9 Contribution per unit = Selling price per unit - Variable Cost per unit                                              = 91 - 41.9                                              = 49 .1 Contribution Margin Ratio = Contribution per unit / selling price perunit                                                       = 49.1 / 91 * 100                                                       = 53.96% 3) Operating Income Contribution Margin Ratio = 0.25 Contribution Margin Ratio = Contribution / Sales Contribution = Contribution Margin ratio * Sales                             = 0.25 * 243000                             = 60750 Contribution - Fixed Cost = Operating Income Fixed Cost = Contribution - operating Income                       = 60750 - 24300                        = 36450 4) Variable Cost Ratio 0.55 FixeD Cost 108020 Number ofunits sold at break even 21000 At Break even point Contribution = Fixed cost Hence , contribution = 108020 Contribution per unit = 108020/21000 = 5.1 Variable Cost Ratio = 1 - Contribution Margin Ratio Contribution MARGIN Ratio = 1 - Variable cost Ratio                                                          = 1 - 0.55                                                          = 0.45 Contribution Margin Ratio = Contribution per unit / Sales price per unit Hence, Sale price perunit = Contribution per unit / contribution margin ratio                                        = 5.14 / 0.45                                        = 11.4 Variable cost per unit = Sale price per unit - contribution margin per unit                                              = 11.42 - 5.14                                              = 6.3 Hence Price = $ 11.4 Variable cost per unit = $ 6.3 Contribution Margin = $ 5.1

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