TORT Company produced 40,000 units of product in 2020. Sales Revenue per unit was $20; variable cost per unit was $12 and contribution margin in total was $320,000. Fixed cost was $220,000 and operating income was $100,000. For blank one, what was the contribution margin ratio (to nearest 0.1%)? For blank two, what was the degree of operating leverage (to nearest 0.01)? For blank three, what was the breakeven point in unit sales? For blank four, what was the margin of safety in unit sales? Blank # 1 A/ Blank # 2 Blank # 3 A/ Blank # 4

TORT Company produced 40,000 units of product in 2020. Sales Revenue per unit was $20; variable cost per unit was $12 and contribution margin in total was $320,000. Fixed cost was $220,000 and operating income was $100,000. For blank one, what was the contribution margin ratio (to nearest 0.1%)? For blank two, what was the degree of operating leverage (to nearest 0.01)? For blank three, what was the breakeven point in unit sales? For blank four, what was the margin of safety in unit sales? Blank # 1 A/ Blank # 2 Blank # 3 A/ Blank # 4

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 36P: Faldo Company produces a single product. The projected income statement for the coming year, based...

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Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?
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Sheridan Bucket Co., a manufacturer of rain barrels, had the following data for 2021: Sales quantity Unit selling price Unit variable costs Fixed costs (a) 2,200 barrels $75 per barrel $45 per barrel $18,480 What is the contribution margin ratio? Contribution margin ratio %
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