Question

part 1

Candle Co. has sales of $200,000 this month, contribution
margin of $100,000, monthly fixed cost of $80,000 and profit of
$20,000. What is the firm’s current breakeven volume in dollars?
(rounded)

Select one:

a. All listed choices are incorrect.

b. $160,000.

c. $180,000.

d. $140,000.

part 2

Candle Co. has sales of $200,000 this month, contribution
margin of $100,000, monthly fixed cost of $80,000 and profit of
$20,000. What is the firm’s current breakeven ratio to sales?
(rounded)

Select one:

a. All listed choices are incorrect.

b. 0.80.

c. 0.70.

d. 0.60.

part 3

Candle Co. has sales of $200,000 this month, contribution
margin of $100,000, monthly fixed cost of $80,000 and profit of
$20,000.What is the firm’s current operating leverage number?
(rounded)

Select one:

a. 5.00.

b. All listed choices are incorrect.

c. 0.20.

d. 0.40.

part 4

Candle Co. has sales of $200,000 this month, contribution
margin of $100,000, monthly fixed cost of $80,000 and profit of
$20,000. What is the firm’s current margin of safety ratio to sales
[ie., safety margin ratio]? (rounded)

Select one:

a. 0.20.

b. All listed choices are incorrect.

c. 0.25.

d. 0.40.

Answer #1

Part 1

Contribution margin ratio = Contribution margin / Sales * 100

= $100,000 / $200,000 * 100

= 50%

Break-even volume in dollars = Fixed cost / Contribution margin ratio

= $80,000 / 50%

= $160,000

The answer is Option b.

Part 2

Contribution margin ratio = Contribution margin / Sales * 100

= $100,000 / $200,000 * 100

= 50%

Break-even volume in dollars = Fixed cost / Contribution margin ratio

= $80,000 / 50%

= $160,000

Break-even ratio to sales = Break-even volume in dollars / Sales

= $160,000 / $200,000

= 0.8

The answer is Option b.

Part 3

Operating leverage = Contribution margin / Profit

= $100,000 / $20,000

= 5

The answer is Option a.

Part 4

Margin of safety ratio to sales = (Sales - Break even sales) / Sales

= ($200,000 - $160,000) / $200,000

= 0.2

The answer is Option a.

Candel Gym has sales of $300,000 this month, contribution margin
of $90,000, monthly fixed cost of $54,000 and profit of $36,000.
What is the firm’s current margin of safety ratio to sales [ie.,
safety margin ratio]?

Bosco Company sells boxes of cookies and has total fixed costs
of $200,000 per month. Variable costs are $8 per box, selling price
is $10. The company desires to make a profit of $100,000 per month.
a. What is number of boxes that most be sold to break even each
month? b. What is the contribution margin ratio? c. What is the $
amount of monthly sales needed in order to make the desired monthly
profit

32.Marissa, Inc. has a contribution margin of 40% and fixed
costs of $200,000. What is the break-even point?
.
Last month Carol Company had a $30,000 profit on sales of
$250,000. Fixed costs are $60,000 a month. What sales revenue is
needed for Calico to break even?

Ripa Company has the following data:
Sales revenue
$360,000
Variable costs
$240,000
Contribution margin
$120,000
Fixed costs
$100,000
Operating income
$ 20,000
What will the contribution margin ratio be at Ripa Company if sales
volume increases by 15%?

Gayne Corporation's contribution margin ratio is 16% and its
fixed monthly expenses are $45,500. If the company's sales for a
month are $302,000, what is the best estimate of the company's net
operating income? Assume that the fixed monthly expenses do not
change.
Multiple Choice
$2,820
$256,500
$208,180
$48,320

Part 1
Abe, Inc. has a contribution margin of $60,000 and net income of
$20,000.
Zeb, Inc. has a contribution margin of $44,000 and net income of
$22,000.
Which of the following statements is false?
Multiple Choice
Abe’s cost structure has a higher percentage of fixed costs than
Zeb’s cost structure.
Abe’s profits are must sensitive to changes in sales.
Abe's net income grows one third as fast as its sales
If sales increase, Abe will experience a greater percentage...

Rastacan Enterprises distributes two products: Model X300 and
Model Z900. Monthly sales and the contribution margin ratios for
the two products follow:
Product : Model X300 Model Z900
Total
Sales: $700,000 $300,000 $1,000,000
Contribution Margin Ratio 60% 70% ?
The company's fixed expenses total $598,500 per month.
1. Prepare a contribution-format income statement for the company
as a whole.
2. Compute the break-even point for the company based on the
current...

A company has sales of $250000, contribution margin of $75000
and profit of $45000, with total fixed expenses amount to $30000.
Variable expenses are 70% of sales.
1. What is its operating leverage?
2.What is its ratio of break-even sales to his current
sales?
3. What is its safety-margin ratio to the target sales?

Contribution Margin Ratio, Break-Even Sales Revenue, Sales
Revenue for Target Profit
Schylar Pharmaceuticals, Inc., plans to sell 140,000 units of
antibiotic at an average price of $17 each in the coming year.
Total variable costs equal $761,600. Total fixed costs equal
$7,500,000.
Required:
1. What is the contribution margin per unit?
Round your answer to the nearest cent.
$
What is the contribution margin ratio? Round your answer to two
decimal places. (Express as a decimal-based answer rather than a...

Break-Even Point and Target Profit Measured in Sales
Dollars (Single Product). Nellie Company has monthly fixed
costs totaling $100,000 and variable costs of $20 per unit. Each
unit of product is sold for $25 (these data are the same as the
previous exercise):
Required:
Calculate the contribution margin ratio.
Find the break-even point in sales dollars.
What amount of sales dollars is required to earn a monthly
profit of $60,000?

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