Question

With the aid of diagrams, explain cost as variable, fixed, or
mixed. (1 mark)

b. With detail examples, explain the methods of separating
mixed cost into fixed and variable costs (1 mark)

c. What is break-even point, explain with a good example and a
diagram

d. Explain the meaning of contribution margin with a good
example

e. A vehicle spare parts dealer has the following information
in her operating budget.

Sales were $1,020,000 with fixed costs for the period of
$160,000. The total variable cost

was $581,400.

Required:

i, The contribution margin

ii Contribution rate

iii Break-even point in sales dollars

Answer #1

CVP ANALYSIS
If the variable cost % is .60 , find the contribution
margin %
Fixed costs= 400 , contribution margin % is .40. Find
sales dollars needed to break even.
Fixed costs= 500 , contribution margin per unit =10.
Find sales in units to earn a net income of 100.
Selling price per unit= 80 ; variable costs per unit=
60; fixed costs= 200.
Find the contrib. margin
%.
Actual sales=600 ; break even sales =400 ; contribution
margin=...

________ is the excess of sales over the cost of goods sold.
A) Gross margin
B) Contribution-margin ratio
C) Variable-cost ratio
D) Contribution margin
Answer:
Which statement is FALSE?
A) Each different sales-mix of products has a different
break-even point.
B) Changes in the sales-mix of products sold affects a company's
net operating profit.
C) Changes in the sales-mix of products sold affects a company's
contribution margin.
D) If the sales-mix of products sold changes, the break-even
point does not...

Question 2.
Case 6 (1 Mark) A company has fixed costs of
$90,000. Its contribution margin ratio is 30% and the product sells
for $75 per unit. What is the company's break-even point in dollar
sales?
Case 7 (1 Mark) Lee Company manufactures and
sells widgets for $2.00 per unit. Its variable cost per unit is
$1.70. Lee's total fixed costs are $10,500. If the Company wants a
profit of $20,000 what is the sales revenue required?
Case 8 (1...

If the variable cost % is .60 , find the contribution margin
%
Fixed costs= 400 , contribution margin % is .40.
Find sales dollars needed to break even.
Fixed costs= 500 , contribution margin per unit =10. Find sales
in units to earn a net income of 100.
Selling price per unit= 80 ; variable costs per unit= 60; fixed
costs= 200.
Find the contrib.
margin %.

Steven Company has fixed costs of $289,518. The unit selling
price, variable cost per unit, and contribution margin per unit for
the company's two products are provided below.
Product
Selling Price per Unit
Variable Cost per Unit
Contribution Margin per Unit
X
$848
$318
$530
Y
645
345
300
The sales mix for Products X and Y is 60% and 40%, respectively.
Determine the break-even point in units of X and Y. Round
answers to the nearest whole number.
units...

At the break-even point
sales equal total variable costs
contribution margin equals
total variable costs contribution margin equals total fixed
costs
sales equal total fixed costs
2. The amount by which actual or expected sales exceeds
break-even sales is referred to as
contribution margin
unanticipated profit
margin of safety
target net income

Howard Company sells its product for $40. The variable costs are
$24. The fixed costs are $80,000.
What is the contribution margin?
What is the break even in units?
What is the break even in sales dollars?
What is the break even in units if they want $160,000 in
profits?
A. 15000
B. $200,000
C. $24
D. 16
E. 5000
F. 3333
G. 10000

What effect will an increase in unit variable cost or total
fixed costs have on the break-even point? What effect will an
increase in the unit sales price have on the break-even point?
Please explain.

Total fixed cost = $66,000
Selling price per unit = $14
Variable costs per unit = $6
Net target income (after tax) = $52,000
Tax rate = 35%.
a)Calculate break even point in units
b) calculate the sales revenue (in dollars) required to achieve
the target income
c) calculate the difference in operating income when one extra
unit is sold
d) if fixed cost increased by 20%, what is the new unit
contribution margin required to maintain the same break-even...

Exercise 6.29 b-c
Embleton Company estimates that variable costs will be 80% of
sales, and fixed costs will total $384,000. The selling price of
the product is $6.
Calculate the break-even point in units and dollars.
Break-even point
units
Break-even point
$
Assuming actual sales are $2,560,000, calculate the margin of
safety in dollars and as a ratio.
Margin of safety
$
Margin of safety ratio
%

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