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# Exercise 18-17 (Part Level Submission) Felde Bucket Co., a manufacturer of rain barrels, had the following...

Exercise 18-17 (Part Level Submission) Felde Bucket Co., a manufacturer of rain barrels, had the following data for 2016. Sales 2,000 units Sales price \$30 per unit Variable costs \$18 per unit Fixed costs \$11,520 Collapse question part (a) Correct answer. Your answer is correct. What is the contribution margin ratio? (Round answer to 0 decimal places, e.g. 5,275.) Contribution margin ratio Entry field with correct answer 40 % Click if you would like to Show Work for this question: Open Show Work SHOW SOLUTION SHOW ANSWER LINK TO TEXT Attempts: 1 of 5 used Collapse question part (b) Correct answer. Your answer is correct. What is the break-even point in dollars? (Round intermediate calculation and final answers to 0 decimal places, e.g. 5,275.) Break-even point \$Entry field with correct answer 28800 Click if you would like to Show Work for this question: Open Show Work SHOW SOLUTION SHOW ANSWER LINK TO TEXT Attempts: 1 of 5 used Collapse question part (c) Correct answer. Your answer is correct. What is the margin of safety in dollars and as a ratio? (Round ratio to 2 decimal places, e.g. 12.25.) Margin of safety \$Entry field with correct answer 31,200 Margin of safety ratio Entry field with correct answer 52 % Click if you would like to Show Work for this question: Open Show Work SHOW SOLUTION SHOW ANSWER LINK TO TEXT Attempts: 1 of 5 used Collapse question part (d) If the company wishes to increase its total dollar contribution margin by 30% in 2017, by how much will it need to increase its sales if selling price per unit, variable price per unit and total fixed costs remain constant? (Round answer to 0 decimal places, e.g. 2,520.) Total increase in sales required

#### Homework Answers

Answer #1

All parts are solved except part d. Please find below the solution for Part d.

Present Total Contribution Margin = (Unit Selling Price \$30 – Unit Variable Expense 18) * Number of Units 2,000

= \$24,000

Present Contribution Margin Ratio = (Unit Selling Price \$30 – Unit Variable Expense 18)   / Unit Selling Price \$30 * 100

= 40%

Desired Contribution Margin in 2017 = \$24,000 + 30% Increase of \$24,000 = \$31,200

Required Sales in dollar to get desired contribution margin in 2017 = Desired Contribution Margin \$31,200 / Contribution Margin Ratio

= \$31,200 / 40%

= \$78,000

Selling price per unit (remain constant) = \$30 per unit

Desired Sales in units = \$78,000 / 30 = 2,600 Units

Total increase in sales required in dollars = Desired \$78,000 – Present 60,000

= \$18,000

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