A company sells small motors as a component part to automobiles. The Model 101 motor sells for $880 and has per-unit variable costs of $528 associated with its production. The company has fixed expenses of $80,000 per month. In August, the company sold 430 of the Model 101 motors. A. Calculate the contribution margin per unit for the Model 101. Contribution margin $fill in the blank aac6e2083006079_1 per unit B. Calculate the contribution margin ratio of the Model 101. Contribution margin ratio fill in the blank aac6e2083006079_2 % C. Prepare a contribution margin income statement for the month of August. Use a minus sign for a net loss if present. Income Statement Sales $fill in the blank fc4b77f7efc204c_2 Variable Costs fill in the blank fc4b77f7efc204c_4 Contribution Margin $fill in the blank fc4b77f7efc204c_6 Fixed Costs fill in the blank fc4b77f7efc204c_8 Net Income (Loss) $fill in the blank fc4b77f7efc204c_10
A company sells small motors as a component part to automobiles. The Model 101 motor sells for $880 and has per-unit variable costs of $528 associated with its production. The company has fixed expenses of $80,000 per month. In August, the company sold 430 of the Model 101 motors. A. Calculate the contribution margin per unit for the Model 101. Contribution margin $fill in the blank aac6e2083006079_1 per unit B. Calculate the contribution margin ratio of the Model 101. Contribution margin ratio fill in the blank aac6e2083006079_2 % C. Prepare a contribution margin income statement for the month of August. Use a minus sign for a net loss if present. Income Statement Sales $fill in the blank fc4b77f7efc204c_2 Variable Costs fill in the blank fc4b77f7efc204c_4 Contribution Margin $fill in the blank fc4b77f7efc204c_6 Fixed Costs fill in the blank fc4b77f7efc204c_8 Net Income (Loss) $fill in the blank fc4b77f7efc204c_10
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 1PA: A company sells small motors as a component part to automobiles. The Model 101 motor sells for $850...
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Question
A company sells small motors as a component part to automobiles. The Model 101 motor sells for $880 and has per-unit variable costs of $528 associated with its production. The company has fixed expenses of $80,000 per month. In August, the company sold 430 of the Model 101 motors.
A. Calculate the contribution margin per unit for the Model 101.
Contribution margin $fill in the blank aac6e2083006079_1 per unit
B. Calculate the contribution margin ratio of the Model 101.
Contribution margin ratio fill in the blank aac6e2083006079_2 %
C. Prepare a contribution margin income statement for the month of August. Use a minus sign for a net loss if present.
| Income Statement | |
| Sales | $fill in the blank fc4b77f7efc204c_2 |
| Variable Costs | fill in the blank fc4b77f7efc204c_4 |
| Contribution Margin | $fill in the blank fc4b77f7efc204c_6 |
| Fixed Costs | fill in the blank fc4b77f7efc204c_8 |
| Net Income (Loss) | $fill in the blank fc4b77f7efc204c_10 |
Expert Solution
Step 1
Contribution margin per unit = Selling price per unit - Variable cost per unit
Contribution margin ratio = Contribution margin per unit / Selling price per unit
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