Toy for children aged 5-8aged :last year there was $100000 in sales from the 500

Question

Toy for children aged 5-8aged :last year there was $100000 in sales from the 5000 units sold. You have been able to ascertain that there were $82,000 in fixed expense and there was a net loss of $12000 recorded. You would like to calculate the following: 1) Total variable expense 2) Contribution margin per unit Toy for children aged 5-8aged :last year there was $100000 in sales from the 5000 units sold. You have been able to ascertain that there were $82,000 in fixed expense and there was a net loss of $12000 recorded. You would like to calculate the following: 1) Total variable expense 2) Contribution margin per unit 1) Total variable expense 2) Contribution margin per unit

Explanation / Answer

1)

VARIABLE COST = 6000

REVENUE =100000

VARIABLE COST = ?   

CONTRIBUTION = ?

FIXED COST = 82000   

PROFIT/(LOSS) =(12000)

from this table we can find CONTRIBUTION MARGIN by reduce 12000 (loss) from FIXED COST of 82000

=82000-12000=70000

Then we need to find the difference between SALES REVENUE AND CONTRIBUTION MARGIN

=100000-70000=30000

so variable cost = 30000.

=100000-30000-82000=(-12000)

2)

Contribution margin per unit = 14

= 70000÷5000=14

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