Question
Hughes Company manufactures harmonicas which it sells for $31 each. Variable costs for each unit are...
Hughes Company manufactures harmonicas which it sells for $31 each. Variable costs for each unit are $15and total fixed costs are $7,000.
How many units must be sold to earn income of $1,000?
A. 63
B. 533
C. 500
D. 258
Ibis Paper Company prepared the following static budget for November:
|
Static Budget |
||
|
Units/Volume |
11,000 |
|
|
Per Unit |
||
|
Sales Revenue |
$22.00 |
$242,000 |
|
Variable Costs |
7.00 |
77,000 |
|
Contribution Margin |
165,000 |
|
|
Fixed Costs |
13,000 |
|
|
Operating Income/(Loss) |
$152,000 |
If a flexible budget is prepared at a volume of 15,000 units, calculate the operating income. The production level is within the relevant range.
A. $165,000
B. $152,000
C. $212,000
D. $225,000
Homework Answers
Answer #1
1. Your required answer is option C i.e. 500
Explanation:
Working Note:
* Contribution per unit = Sales revenue - Variable Cost
Contribution per unit = \$31-\$15
Contribution per unit = \$16
2. Your required answer is option C i.e. $212,000
Explanation:
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