Question

Ariba Corporation reaches its breakeven point at $3,200,000 of revenues. At present, it is selling 105,000...

Ariba Corporation reaches its breakeven point at $3,200,000 of revenues. At present, it is selling 105,000 units and its variable costs are $30. Fixed manufacturing costs $800,000.

1. Compute the contribution margin percentage.              

2. Compute the selling price.                                             

3. Compute the margin of safety in units and dollars.     

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

1) contribution margin = 25%

2) selling price per unit = $40

3) margin of safety

in units = 25000 units

In dollars = $1000,000

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Calculate the breakeven point and contribution margin. Breakeven point Fixed cost Contribution margin Selling price per...
Calculate the breakeven point and contribution margin. Breakeven point Fixed cost Contribution margin Selling price per unit Variable cost per unit units $88,400 $ $9 $5
UX Corporation sells a single product for $40. Its management estimates the following revenues and costs...
UX Corporation sells a single product for $40. Its management estimates the following revenues and costs for the year 2020: Net sales $388,000 Selling expenses—variable $21,100 Direct materials 85,400 Selling expenses—fixed 20,100 Direct labour 56,400 Administrative expenses—variable 9,400 Manufacturing overhead—variable 21,700 Administrative expenses—fixed 9,800 Manufacturing overhead—fixed 9,700 a)Assuming fixed costs and net sales are spread evenly throughout the year, determine YUX’s monthly break-even point in units and dollars b) Calculate the contribution margin ratio, the annual margin of safety ratio,...
Crane Corporation has collected the following information after its first year of sales. Sales were $1,600,000...
Crane Corporation has collected the following information after its first year of sales. Sales were $1,600,000 on 100,000 units, selling expenses $240,000 (40% variable and 60% fixed), direct materials $514,000, direct labor $270,800, administrative expenses $280,000 (20% variable and 80% fixed), and manufacturing overhead $376,000 (70% variable and 30% fixed). Top management has asked you to do a CVP analysis so that it can make plans for the coming year. It has projected that unit sales will increase by 10%...
Momento Camera Company is considering introducing a new video camera. Its selling price is projected to...
Momento Camera Company is considering introducing a new video camera. Its selling price is projected to be $ 1 comma 100 per unit. Variable manufacturing costs are estimated to be $ 550 per unit. Variable selling costs are 5 % of sales dollars. The company expects the annual fixed manufacturing costs for the new camera to be $ 3 comma 465 comma 000. Requirements ?(a) Compute Momento?'s contribution margin per unit and contribution margin ratio. ?(b) Determine the number of...
Risk assessment calculations Baseline information: 40,000 units sold at a unit selling price of $100, variable...
Risk assessment calculations Baseline information: 40,000 units sold at a unit selling price of $100, variable costs of $80 per unit, fixed costs of $750,000 1. Calculate the contribution margin per unit in dollars and as a percentage 2. Prepare a financial report in the contribution margin format Calculate the breakeven point in dollars and unit sales 4. Prove the validity of the breakeven calculation by preparing a financial report using the contribution margin format 5. Calculate the performance level...
Please answer a3 The Vice President for Sales and Marketing at Waterways Corporation is planning for...
Please answer a3 The Vice President for Sales and Marketing at Waterways Corporation is planning for production needs to meet sales demand in the coming year. He is also trying to determine how the company’s profits might be increased in the coming year. This problem asks you to use cost-volume-profit concepts to help Waterways understand contribution margins of some of its products and decide whether to mass-produce any of them. Waterways markets a simple water control and timer that it...
The Frosty Corporation manufactures and sells snow rakes. The rakes sell for $20 each. Information about...
The Frosty Corporation manufactures and sells snow rakes. The rakes sell for $20 each. Information about the company’s costs is as follows: Variable manufacturing cost per unit- $6 Variable selling and administrative cost per unit- $2 Fixed manufacturing overhead per month- $300,000 Fixed selling and administrative cost per month- $600,000 1.Determine the company’s monthly breakeven point in units 2. Determine the sales volume (in dollars) required for a monthly operating income of $1,200,000. 3. Compute the company’s margin of safety...
NRG Ltd has a current breakeven point of 43,000 units. Which of the following would result...
NRG Ltd has a current breakeven point of 43,000 units. Which of the following would result in a decrease to the breakeven point? a. a decrease in the variable costs per unit b. an increase in the contribution margin per unit c. a decrease in the selling price per unit d. an increase in the fixed costs
- The margin of safety is: a) The difference between estimated sales and breakeven sales. b)...
- The margin of safety is: a) The difference between estimated sales and breakeven sales. b) Not a useful measure for management in understanding the risk associated with a product line. c) The amount sales can drop before the target profit is met. d) How far sales must increase to earn a profit. - Which of the following is the amount by which sales could drop before profits reach the breakeven point? a) Operating leverage b) Total contribution margin c)...
Which of the following statements are true? - The breakeven point (in revenues) is equal to...
Which of the following statements are true? - The breakeven point (in revenues) is equal to fixed costs divided by the unit contribution margin. - Breakeven point is the point where revenues equal total expenses including the cost of goods sold. Select one: a. I don't know the answer b. Both statements c. Statement 2 only d. Statement 1 only e. Neither statement
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT