29. Question worth 12 points: The Store sells Auto Doggie pet food dispenser sys

Question

29. Question worth 12 points: The Store sells Auto Doggie pet food dispenser systems for $50 each systems include the unit and a one-month pet costs are fixed cpply of pet food. The cost of the unit and food is $35. During the current period, Quality sold 600 of the units through the store's new on-line catalog division. a. What is the contribution margin per unit?s unit b. What is the contribution margin ratio? -2 Tola Soleo Powe c. What is the breakeven point in units? units units d. What is the margin of safety in units?

Explanation / Answer

a. Contribution Margin Per Unit= Sales Revenue Per Unit - Variable Cost Per Unit

= $ 50 - $ 35

= $ 15

Hence the correct answer is $ 15

b. Contribution Margin  Ratio =  Contribution Margin / Sales Revenue *100

= $ 15/ $ 50 *100

= 30%

Hence the correct answer is 30%

c. Breakeven Point in units = Fixed Cost / Contribution Margin Per Unit

= $ 3,000 / $ 15

= 200 Units

Hence the correct answer is 200 units

d. Margin of Safety in Units = Actual Sales - Breakeven Sales

= 600 units - 200 units

= 400 units

Hence the correct answer is 400 units

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