Exercise 6-1& 6-5
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EXERCISE 6-1 1). Total Sales (10,100 units) (-) Variables Expenses Contribution Margin (-) Fixed Expenses Net Operating Income
Per Unit $ 353,000 202,000 $ 151,000 135,000 $ 16,500
$ 35.00 20.00 $ 15.00
2). Sales (9,900 units) (-) Variables Expenses Contribution Margin (-) Fixed Expenses Net Operating Income
Total $ 346,000 198,000 $ 148,000 135,000 $ 13,500
Per Unit $ 35.00 20.00 $ 15.00
3). Sales (9000 units) (-) Variable Expenses Contribution Margin (-) Fixed Expenses Net Operating Income
Total Per Unit $ 315,000 $ 35.00 180,000 20.00 $ 135,000 $ 15.00 135,000 0
EXERCISE 6-5 Profits = (sales – Variable Expenses) – Fixed Expenses 1. $ 15Q = $12Q + $4,200 - $ 4,197 $ 3Q = 3 Q=1 2. Profits = (15-12)-4,200 Loss = $ 4,197 Sales = 12 + 4,200 – 4,197 Sales = $ 15 3. Break-even point in unit sold = Fixed Expenses
Unit Contribution Margin = $ 4,200 $ 3 (15-12) Break even point (unit) = 1,400 units 4. Break-even point in total sales dollars = Fixed Expenses
CM ratio = 4,200 0.2 Break even point ($) = $ 21,000
Per Unit $ 353,000 202,000 $ 151,000 135,000 $ 16,500
$ 35.00 20.00 $ 15.00
2). Sales (9,900 units) (-) Variables Expenses Contribution Margin (-) Fixed Expenses Net Operating Income
Total $ 346,000 198,000 $ 148,000 135,000 $ 13,500
Per Unit $ 35.00 20.00 $ 15.00
3). Sales (9000 units) (-) Variable Expenses Contribution Margin (-) Fixed Expenses Net Operating Income
Total Per Unit $ 315,000 $ 35.00 180,000 20.00 $ 135,000 $ 15.00 135,000 0
EXERCISE 6-5 Profits = (sales – Variable Expenses) – Fixed Expenses 1. $ 15Q = $12Q + $4,200 - $ 4,197 $ 3Q = 3 Q=1 2. Profits = (15-12)-4,200 Loss = $ 4,197 Sales = 12 + 4,200 – 4,197 Sales = $ 15 3. Break-even point in unit sold = Fixed Expenses
Unit Contribution Margin = $ 4,200 $ 3 (15-12) Break even point (unit) = 1,400 units 4. Break-even point in total sales dollars = Fixed Expenses
CM ratio = 4,200 0.2 Break even point ($) = $ 21,000
