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.

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

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

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...

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?

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?

BM Company sells two products, X and Y. Product X sells for $20 per
unit with variable costs of $11 per unit. Product Y sells for $30
per unit with variable costs of $16 per unit. During this period,
BM sold 16,000 units of X and 4,000 units of Y, making Total
Revenue of $440,000, and after subtracting variable cost got Total
Contribution Margin of $200,000, and after subtracting Total Fixed
Cost of $110,000, earned Operating Profit of $90,000. When...

Menlo Company distributes a single product. The company’s sales
and expenses for last month follow:
Total
Per Unit
Sales
$
316,000
$
20
Variable
expenses
221,200
14
Contribution
margin
94,800
$
6
Fixed
expenses
78,000
Net operating
income
$
16,800
Required:
1. What is the monthly break-even point in unit sales and in
dollar sales?
Break Even Point in unit sales
Break
Even Point in dollar sales
2. Without resorting to computations, what is the total
contribution margin at...

Thomas Co. Provides the following fixed budget data for the
year:
Sales(20,000 units) CR: 600,000
Cost of sales:
DM D: 200,000
DL D: 160,000
Variable Overhead D: 60,000
Fixed Overhead D: 80,000 C:500,000
Gross Profit C:100,000
Operating Expenses:
Fixed D:12,000
Var. D: 40,000 C:52,000
Income from Operations C: 48,000
Required:
Prepare the flexible budget that should be used for a
performance report assuming that the department will produce 24,000
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How is profit indicated on a cost-volume-profit
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Wuntch Products sold 100,000 units last year for $2.00 each.
Variable costs per unit were $0.30 for direct materials, $0.50 for
direct labor, and $0.30 for variable overhead. Fixed costs were
$60,000 in manufacturing overhead and $40,000 in nonmanufacturing
costs.
a. What is the total contribution
margin?
b. What is the unit contribution
margin?
c. What is the contribution margin
ratio?
d. If sales increase by 20,000 units,
by how much will...

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