Question

Burger Bob’s Boathouse sells only one product. 7,000 units were sold in a year resulting in $70,000 of sales revenue. Variable costs were $40,041 for the year, and fixed costs were $12,100. 4.   Contribution margin per unit is a.   $6.00 b.   $4.29 c.   $4.00 d.   $4.28 e.   $4.27 5.   Break-even point in volume is a.   2,827 units. b.   2,828 units. c.   2,827.1 units. d.   2,827.103 units. e.   2,827.102 units. 6.   The number of units required to be sold to achieve $26,900 of operating profit is a.   9,112 units. b.   9,113 units. c.   9,112.14 units. d.   9,112.15 units. e.   9,112.149 units.

Answer 1

4. OPTION - D. $4.28.

Contribution Margin Per Unit => (Sales - Variable Cost)/Units sold => ($70,000 - $40,041)/7,000 = $4.28.

5.OPTION - C 2,827.1 Units.

Breakeven Point =>Fixed Cost/Contribution Margin ratio => ($12,100)/42.79% = 2,827.1Units

6. Option - A. 9112 Units

Targeted Sales => (Fixed cost + Desired Profit)/ Contribution Margin Per Unit => ($12,100 + $$26,900)/$4.28 = 9,112 Units.

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