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Solution Post-Test4

The document contains financial information for different scenarios including sales, variable costs, contribution margins, fixed costs, and net operating incomes. It analyzes the impacts of increasing units sold, variable costs, selling prices, advertising budgets, and salaries on overall profits. Key metrics like contribution margin ratios and break-even points are also calculated and compared across situations.

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Shienell Pinca
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11 views

Solution Post-Test4

The document contains financial information for different scenarios including sales, variable costs, contribution margins, fixed costs, and net operating incomes. It analyzes the impacts of increasing units sold, variable costs, selling prices, advertising budgets, and salaries on overall profits. Key metrics like contribution margin ratios and break-even points are also calculated and compared across situations.

Uploaded by

Shienell Pinca
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Per Unit

Selling price 170


Variable Cost 68
Contribution Margin 102
Fixed Cost per month 521,000

Units per month 7,000


Units Increased in 500 7,500

Per Unit
VC Increased in 6 74

Sales ( 8,000 x 220) 1,760,000


Less: Variable Cost (8,000 x 66) 528,000
Contribution Margin 1,232,000 (8,000 x 154) Sales (7,000 x 170) 1,190,000
Less: Fixed Cost 991,000 Less: Variable Cost (7,000 x 68) 476,000
Net Operating Income 241,000 Contribution Margin 714,000
Less: Fixed Cost 521,000
Sales (8,200 x 220) 1,804,000 Net Operating Income 193,000
Less: Variable Cost (66 per unit plus
(8,200 x 77) 631,400 the sales Sales( 7,500 x 170) 1,275,000
Contribution Margin 1,172,600 commissions of 11 Less: Variable Cost
Less: Fixed Cost = 77 per unit) (7,500 x 74) 555,000
(991,000 - 74,000) 917,000 Contribution Margin 720,000
Net Operating Income 255,600 Less: Fixed Cost 521,000
Net Operating Income 199,000
Increased in 14,600
Increased in 6,000
Sales - Breakeven = Margin of safety
120,000 - Breakeven = 24,000
Breakeven = 120,000 - 24,000
Breakeven = 96,000

Sales 120,000
Less: Variable Cost 80,000
Contribution Margin 40,000

Sales (5,000 x 160) 800,000 CM ratio = CM / Sales


Less: Variable Cost (5,000 x 48) 240,000 40,000 / 120,000
Contribution Margin 560,000 Per unit CM Rration= 0.333333333
Less: Fixed Cost 499,000 Selling price 160
Net Operating Income 61,000 VC 48 FC= 96,000 X 0.33333
CM 112 FC = 32,000
Sales(5,900 x 147 867,300 FC 499,000
Less: Variable Cost
(5,900 x 48) 283,200 Selling price cut in 13 147
Contribution Margin 584,100 Increased in advertising 33,000
Less: Fixed Cost Units 5,000
(499,000 + 33,000) 532,000 Increased 5,900
Net Operating Income 52,100

decreased of -8,900
Sales 300,000 Sales 360,000
Less: VC 210,000 0.7 Less: VC 252,000
Contribution Margin 90,000 Contribution Margin 108,000
Less: FC Less: FC 81,000
Net Income Net Income 27,000

Operating leverage = CM / NP Contribution Margin 108,000


10 = 90,000 / NP Divide by: Net Income 27,000
NP = 90,000 / 10 Operating Leverage 4
NP = 9,000

Sales - Breakeven = Margin safety CM = FC - NP


400000 - Breakeven = 100,000 FC= 90,000 - 9,0000
Breakeven = 400,000 - 100,000 FC= 81,000
Breakeven = 300,000

Breakevemn = FC / Contribution Margin


300,000 = FC / 0.75
FC= 300,000 x 0.75
FC= 225,000
PER UNIT PER UNIT
Sales (1,000) 160000 Selling price 160 Sales (4,000) 800000 Selling price 200
Less: VC 48000 VC 48 Less: VC 160000 VC 40
Contribution Margin 112000 CM 112 Contribution Margin 640000 CM 160
Less: FC 87,000 Less: FC 531,000
Net Income 25,000 FC 87,000 Net Income 109,000 FC 531,000

Sales (1,500) 224000 Units 1,000 Sales (4,500) 837000 Units 4,000
Less: VC 106400 Units Increased 1,400 Less: VC 180000 Units Increased 4,500
Contribution Margin 117600 VC increased in 28 76 Contribution Margin 657000 Selling price cut by 14 186
Less: FC 87,000 Less: FC increase the advertising budget
Net Income 30,600 (531,000 + 35,000) 566,000 by $35,000 per month
Net Income 91,000
Increased in 5,600 Decreased of 18,000
Assume that Contribution Margin is 40% PER UNIT
Sales (6,000) 600000 Selling price 100
Sales (500 * 100) 50,000 Less: VC 120000 VC 20
Less: VC 30,000 Contribution Margin 480000 CM 80
CM 20,000 40 * 500 = 20,000 Less: FC 384,000
Less: FC 12,000 Net Income 96,000 FC 384,000
NP 8,000
Sales (6,500) 650000 Units 6,000
Contribution Margin = Selling Price per unit- VC per Unit Less: VC 188500 Units Increased 6,500
Contribution Margin per unit= 100 - 60 Contribution Margin 461500 VC increased of 9 29
100 -60 = 40 Less: FC
CM = 40 (384,000 - 46,000) 338,000 decrease in their salaries
Net Income 123,500 of $46,000 per month
Increasef of 27,500

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