A company sold 11,500 units last year for $21 each. Variable costs per unit were $2.00 for direct materials, $2.00 for direct labor, and $3.20 for variable overhead. Fixed costs were $61,600 in manufacturing overhead and $42,000 in nonmanufacturing costs. Required: a. What is the total contribution margin? Note: Round your intermediate calculations to 2 decimal places. b. What is the unit contribution margin? Note: Round your answer to 2 decimal places. c. What is the contribution margin ratio? Note: Round your intermediate calculations and final answer to 2 decimal places. d. If sales increase by 2,120 units, by how much will profits increase? Note: Round your intermediate calculation to 2 decimal places and final answer to the nearest dollar amount. a. Total Contribution Margin b. Unit Contribution Margin c. Contribution Margin Ratio d. Profits Increase
A company sold 11,500 units last year for $21 each. Variable costs per unit were $2.00 for direct materials, $2.00 for direct labor, and $3.20 for variable overhead. Fixed costs were $61,600 in manufacturing overhead and $42,000 in nonmanufacturing costs. Required: a. What is the total contribution margin? Note: Round your intermediate calculations to 2 decimal places. b. What is the unit contribution margin? Note: Round your answer to 2 decimal places. c. What is the contribution margin ratio? Note: Round your intermediate calculations and final answer to 2 decimal places. d. If sales increase by 2,120 units, by how much will profits increase? Note: Round your intermediate calculation to 2 decimal places and final answer to the nearest dollar amount. a. Total Contribution Margin b. Unit Contribution Margin c. Contribution Margin Ratio d. Profits Increase
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 20E
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