Question

Please answer a3

The Vice President for Sales and Marketing at Waterways
Corporation is planning for production needs to meet sales demand
in the coming year. He is also trying to determine how the
company’s profits might be increased in the coming year. This
problem asks you to use cost-volume-profit concepts to help
Waterways understand contribution margins of some of its products
and decide whether to mass-produce any of them.

Waterways markets a simple water control and timer that it
mass-produces. Last year, the company sold 738,000 units at an
average selling price of $4.20 per unit. The variable costs were
$1,859,760, and the fixed costs were $867,888.

**a1 Computation of Contribution Margin
Ratio:**

Contribution per unit = Selling price per unit - Variable expense per unit

Variable Cost per unit = $1,859,760 / 738,000 units = $2.52 per unit

Therefore, Contribution per unit = $4.20 - $2.52 = $1.68 per unit

Contribution Margin Ratio = Contribution per unit / Selling price per unit * 100

**Contribution Margin Ratio = $1.68 / $4.20
*100 = 40%**

**a2 Computation of company’s break-even point in units
and in dollars for this product:**

Break Even Units = Fixed Cost/Average Contribution Margin per unit

**Break Even Units = $867,888/$1.68 = 516,600
units**

**Computation of Breakeven in dollars:**

Breakeven in dollars = Break Even Units * Selling price per unit

Breakeven in dollars = 516,600 * $4.20 = $2,169,720

What is the margin of safety, both in dollars and as a ratio?
*(Round ratio to 0 decimal places, e.g.
25%.)*

Margin of safety in dollars |
$ |
||

Margin of safety ratio | % |

Answer #1

**Answer:-**

Please answer a2
The Vice President for Sales and Marketing at Waterways
Corporation is planning for production needs to meet sales demand
in the coming year. He is also trying to determine how the
company’s profits might be increased in the coming year. This
problem asks you to use cost-volume-profit concepts to help
Waterways understand contribution margins of some of its products
and decide whether to mass-produce any of them.
Waterways markets a simple water control and timer that it...

The Vice President for Sales and Marketing at Waterways
Corporation is planning for production needs to meet sales demand
in the coming year. He is also trying to determine how the
company’s profits might be increased in the coming year. This
problem asks you to use cost-volume-profit concepts to help
Waterways understand contribution margins of some of its products
and decide whether to mass-produce any of them.
Waterways markets a simple water control and timer that it
mass-produces. Last year,...

The Vice President for Sales and Marketing at Waterways
Corporation is planning for production needs to meet sales demand
in the coming year. He is also trying to determine how the
company’s profits might be increased in the coming year. This
problem asks you to use cost-volume-profit concepts to help
Waterways understand contribution margins of some of its products
and decide whether to mass-produce any of them.
Waterways markets a simple water control and timer that it
mass-produces. Last year,...

The Vice President for Sales and Marketing at Waterways
Corporation is planning for production needs to meet sales demand
in the coming year. He is also trying to determine how the
company’s profits might be increased in the coming year. This
problem asks you to use cost-volume-profit concepts to help
Waterways understand contribution margins of some of its products
and decide whether to mass-produce any of them.
Waterways markets a simple water control and timer that it
mass-produces. Last year,...

Waterways Continuing Problem 06 a (Part 3)
The section of Waterways that produces controllers for the
company provided the following information.
Sales in units for month of February
4,100
Variable manufacturing cost per unit
$10.00
Sales price per unit
$46.00
Fixed manufacturing overhead cost (per month for
controllers)
$79,000
Variable selling and administrative expenses per unit
$3.80
Fixed selling and administrative expenses (per month for
controllers)
$14,310
Using this information for the controllers, determine the
contribution margin ratio, the degree...

Vice President for Sales and Marketing Sam Totter is trying to
plan for the coming year in terms of production needs to meet the
sales demand. He is also trying to determine ways in which the
company’s profits might be increased in the coming year.
Instructions :
Northern Illinois Manufacturing markets a simple water control
and timer that it mass-produces. During last year, the company sold
701,000 units at an average selling price of 4.20 per unit. The
variable expenses...

Unit sales 20,000 units
Selling price per unit $60 per unit
Variable expenses per unit $45 per unit
Fixed expenses $240,000
CVP Relationships Compute the CM ratio
Selling price per unit Variable expenses per unit =
Contribution margin per unit =
CM ratio =
Compute the break-even
Break-even in unit sales=
Break-even in dollar sales=
Compute the margin of safety
Margin of safety in dollars=
Margin of safety percentage=

Break-Even Units, Contribution Margin Ratio, Multiple-Product
Breakeven, Margin of Safety, Degree of Operating Leverage
Jellico Inc.'s projected operating income (based on sales of
450,000 units) for the coming year is as follows:
Total
Sales
$11,700,000
Total variable cost
8,190,000
Contribution margin
$3,510,000
Total fixed cost
2,254,200
Operating income
$1,255,800
Required:
1(a). Compute variable cost per unit. Round
your answer to the nearest cent.
$per unit
1(b). Compute contribution margin per unit.
Round your answer to the nearest cent.
$per unit...

Oriole Bucket Co., a manufacturer of rain barrels, had the
following data for 2019.
Sales
2,940
units
Sales price
$50
per unit
Variable costs
$40
per unit
Fixed costs
$11,760
(a)
Correct answer iconYour answer is correct.
What is the contribution margin ratio?
Contribution margin ratio
enter the Contribution margin ratio in percentages
%
(b)
Correct answer iconYour answer is correct.
What is the break-even point in dollars?
Break-even point
$enter the break-even point in dollars
(c)
Margin of safety...

Carla Vista Bucket Co., a manufacturer of rain barrels, had the
following data for 2019.
Sales
2,330
units
Sales price
$70
per unit
Variable costs
$42
per unit
Fixed costs
$32,620
(a)
Correct answer iconYour answer is correct.
What is the contribution margin ratio?
Contribution margin ratio
%
(b)
Correct answer iconYour answer is correct.
What is the break-even point in dollars?
Break-even point
$
(c)
What is the margin of safety in dollars and as a ratio?
Margin of...

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