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Cost-Volume-Profit Relations: Missing Data Following are data from 4 separate companies. Supply the missing data in...

Cost-Volume-Profit Relations: Missing Data
Following are data from 4 separate companies. Supply the missing data in each independent case.

Case 1 Case 2 Case 3 Case 4
Sales revenue $100,000 $90,000 Answer Answer
Contribution margin $40,000} Answer $20,000 Answer
Fixed Costs $24,000 Answer Answer Answer
Net income Answer $7,000 $9,000 Answer
Variable cost ratio Answer 0.50 Answer 0.20
Contribution margin ratio Answer Answer 0.40 Answer
Break-even point (dollars) Answer Answer Answer $20,000
Margin of safety (dollars) Answer Answer Answer $30,000
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Answer #1

Following are data from 4 separate companies. Supply the missing data in each independent case.

Case 1 Case 2 Case 3 Case 4
Sales revenue $100,000 $90,000 20000/.40 = 50000 50000
Contribution margin $40,000} 90000*50% = 45000 $20,000 50000*.80 = 40000
Fixed Costs $24,000 45000-7000 = 38000 20000-9000 = 11000 20000*.8 = 16000
Net income 40000-24000 = 16000 $7,000 $9,000 40000-16000 = 24000
Variable cost ratio (100000-40000)/100000 = 60% 0.50 30000/50000 = 0.60 0.20
Contribution margin ratio 40000/100000 = 40% 45000/90000 = 50% 0.40 0.80
Break-even point (dollars) 24000/.40 = 60000 38000/.50 = $76000 11000/.40 = 27500 $20,000
Margin of safety (dollars) 100000-60000 = 40000 90000-76000 = 14000 50000-27500 = 22500 $30,000
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