Case Case #2 Case #3 Case #4 20,400 6,000 S 180,000 Unit sold Sales Variable exp

Question

Case Case #2 Case #3 Case #4 20,400 6,000 S 180,000 Unit sold Sales Variable expenses Fixed expenses Net operating income (loss) Contribution margin per unit 8,400 $260,400 287,700 109.200 285,600 98,000 168,000 81,000 $ (44,700 67,800 (15,000) 9 $ Assume that more than one product is being sold in each of the four following case situations: Sales Variable expenses Fixed expenses Net operating income (loss) Average contribution margin ratio (percent) $ 451,000199,000 131,340 62,000 S 296,000 82,880 471,000 $ 81,240 S (10,880) 64,890 39% 78%

Explanation / Answer

Case 1

Net operating income = $53200

Contribution margin per unit = 18

Variable expenses = $275110

Fixed expenses = $111000

Case 2

Unit sold = 13700

Variable expense = $164400

Net operating income = $5660

Average contribution margin ratio (%) = 34%

Case 3

Sales = $428400

Fixed expense = $75000

Sales = $708000

Variable expense = $155760

Case 4

Variable expense = $114000

Contribution margin per unit = 11

Fixed expense = $224000

Average contribution margin (%) = 72%

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