Question

At the break-even point, Jefferson Company sells 115,000 units and has fixed cost of $350,000. The variable cost per unit is $0.30. What price does Jefferson charge per unit? Note: Round to the nearest cent. $ 2. Sooner Industries charges a price of $114 and has fixed cost of $421,500. Next year, Sooner expects to sell 14,000 units and make operating income of $184,000. What is the variable cost per unit? What is the contribution margin ratio? Note: Round your variable cost per unit answer to the nearest cent. Enter the contribution margin ratio as a percentage, rounded to two decimal places. Variable cost per unit $ Contribution margin ratio % 3. Last year, Jasper Company earned operating income of $13,560 with a contribution margin ratio of 0.15. Actual revenue was $226,000. Calculate the total fixed cost. Note: Round your answer to the nearest dollar, if required. $ 4. Laramie Company has variable cost ratio of 0.40. The fixed cost is $66,000 and 22,000 units are sold at break-even. What is the price? What is the variable cost per unit? The contribution margin per unit? Note : Do NOT round interim computations. Round answers to the nearest cent. Price $ Variable cost per unit $ Contribution margin per unit $

Answer 1

Problem 1 –

At the break-even point, Jefferson Company sells 115,000 units and has fixed cost of $350,000. The variable cost per unit is $0.30. What price does Jefferson charge per unit? Note: Round to the nearest cent

At break-even point the total contribution margin equal to total fixed costs. It means at break even point contribution margin = $350,000

The Sales Revenue = Contribution Margin + Total Variable Costs

= $350,000 + (115,000 Units * $0.30)

= $350,000 + $34,500

= $384,500

Selling Price Per Unit = Total Sales Revenue $384,500 / Units 115,000

= $3.34 per unit

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