Disc Buddy, Inc. produces flash drives. The selling price is $8 per drive. The variable cost of production is $2.40 per unit and the fixed cost per month is $3,600. a. Calculate the contribution margin associated with each flash drive. b. In August, the company sold 200 more flash drives than planned. What is the expected effect on profit of selling the additional drives? c. Calculate the contribution margin ratio associated with one flash drive. d. In October, the company had sales that were $2,400 higher than planned.
Disc Buddy, Inc. produces flash drives. The selling price is $8 per drive. The variable cost of production is $2.40 per unit and the fixed cost per month is $3,600. a. Calculate the contribution margin associated with each flash drive. b. In August, the company sold 200 more flash drives than planned. What is the expected effect on profit of selling the additional drives? c. Calculate the contribution margin ratio associated with one flash drive. d. In October, the company had sales that were $2,400 higher than planned.
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 10E: Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22...
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Disc Buddy, Inc. produces flash drives. The selling price is $8 per drive. The variable cost of production is $2.40 per unit and the fixed cost per month is $3,600.
a. Calculate the contribution margin associated with each flash drive.
b. In August, the company sold 200 more flash drives than planned. What is the expected effect on profit of selling the additional drives?
c. Calculate the contribution margin ratio associated with one flash drive.
d. In October, the company had sales that were $2,400 higher than planned. What is the expected effect on profit related to the additional sales?
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