Question

Cranberry Wood Products Inc. spends an average of $9.30 in labor and $12.60 in materials on every unit it sells. Sales commissions and shipping amount to another $3.10. All other costs are fixed and add up to $149,000 per month. The average unit sells for $32.00.

- What is Cranberry's contribution? Round the answer to two
decimal places.

$

What is Cranberry's contribution margin? Round the answer to two decimal places.

% - What is the firm's breakeven point in units? Round the answer
to the nearest whole number.

units - Calculate the dollar breakeven point. Do not round intermediate
calculations. Round the answer to the nearest whole dollar.

$ - Sketch the breakeven diagram.

Answer #1

a. Contribution per unit = Sales Price - Variable Price =

Selling Price | 32 |

Variable Costs | |

Labor | -9.3 |

Materials | -12.6 |

Sales Commission & | |

Shipping | -3.1 |

Contribution per Unit |
7.0 |

b. Breakeven Point in Units = Fixed Costs / Contribution per unit = 149000 / 7 = 21285.7 = 21286 Units

c. Dollar Breakeven point = 21286 * 32 = 681,152 $

d. Break even Graph

Units
Sold |
Contribution |
Fixed
Costs |
Profit /
(Loss) |

15000 | 105000 | 149000 | -44000 |

18000 | 126000 | 149000 | -23000 |

21285.71429 | 149000 | 149000 | 0 |

24000 | 168000 | 149000 | 19000 |

26000 | 182000 | 149000 | 33000 |

Problem 14-10
Cranberry Wood Products Inc. spends an average of $10.50 in
labor and $12.00 in materials on every unit it sells. Sales
commissions and shipping amount to another $2.50. All other costs
are fixed and add up to $146,000 per month. The average unit sells
for $32.00.
What is Cranberry's contribution? Round the answer to two
decimal places.
$
What is Cranberry's contribution margin? Round the answer to two
decimal places.
%
What is the firm's breakeven point in...

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Round up "Breakeven sales volume" answer to nearest whole
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Note: round all decimals to three places in the
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Jellico Inc.'s projected operating income (based on sales of
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Total
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Total variable cost
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Contribution margin
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Total fixed cost
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Operating income
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Enter your answer to the nearest...

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Required:
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