Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Chapter 16, Problem 10E
Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of $22 each in the coming year. Total variable costs equal $1,086,800. Total fixed costs equal $8,000,000.
(Round all ratios to four significant digits, and round all dollar amounts to the nearest dollar.)
Required:
- 1. What is the contribution margin per unit? What is the contribution margin ratio?
- 2. Calculate the sales revenue needed to break even.
- 3. Calculate the sales revenue needed to achieve a target profit of $245,000.
- 4. What if the average price per unit increased to $23.50? Recalculate:
- a. Contribution margin per unit
- b. Contribution margin ratio (rounded to four decimal places)
- c. Sales revenue needed to break even
- d. Sales revenue needed to achieve a target profit of $245,000
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Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of $22 each in the coming year. Total variable costs equal $1,086,800. Total fixed costs equal $8,000,000.
(Round all ratios to four significant digits, and round all dollar amounts to the nearest dollar.)Required:1. What is the contribution margin per unit? What is the contribution margin ratio?2. Calculate the sales revenue needed to break even.3. Calculate the sales revenue needed to achieve a target profit of $245,000.4. What if the average price per unit increased to $23.50? Recalculate:a. Contribution margin per unitb. Contribution margin ratio (rounded to four decimal places)c. Sales revenue needed to break evend. Sales revenue needed to achieve a target profit of $245,000
Schylar Pharmaceuticals, Inc., plans to sell 120,000 units of antibiotic at an average price of $18 each in the coming year. Total variable costs equal $820,800. Total fixed costs equal $7,600,000.
1. What if the average price per unit increased to $19.50? Recalculate the following:
a. Contribution margin per unit. Round your answer to the nearest cent.
b. Contribution margin ratio. Enter your answer as a decimal value (not a percentage), rounded to four decimal places.
c. Sales revenue needed to break even. In your computations, use your rounded answer from part (4-b) above for the contribution margin ratio, and round your final answer to the nearest dollar.
d. Sales revenue needed to achieve a target profit of $270,000. In your computations, use your rounded answer from part (4-b) above for the contribution margin ratio, and round your final answer to the nearest dollar.
Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of $15 each in the coming year. Total variable costs equal $702,000. Total fixed costs equal $7,600,000.
Required:
1. What is the contribution margin per unit? Round your answer to the nearest cent.
What is the contribution margin ratio? Round your answer to two decimal places. (Express as a decimal-based answer rather than a whole percent amount.)
2. Calculate the sales revenue needed to break even. Round your answer to the nearest dollar.
3. Calculate the sales revenue needed to achieve a target profit of $260,000. Round your answer to the nearest dollar.
4. What if the average price per unit increased to $16.50? Recalculate the following:
a. Contribution margin per unit. Round your answer to the nearest cent.
b. Contribution margin ratio. Enter your answer as a decimal value (not a percentage), rounded to four decimal places.
c. Sales revenue needed to break even. In your computations,…
Chapter 16 Solutions
Cornerstones of Cost Management (Cornerstones Series)
Ch. 16 - Prob. 1DQCh. 16 - Describe the difference between the units-sold...Ch. 16 - Define the term break-even point.Ch. 16 - Explain why contribution margin per unit becomes...Ch. 16 - A restaurant owner who had yet to earn a monthly...Ch. 16 - What is the variable cost ratio? The contribution...Ch. 16 - Prob. 7DQCh. 16 - Suppose a firm with a contribution margin ratio of...Ch. 16 - Prob. 9DQCh. 16 - Explain how CVP analysis developed for single...
Ch. 16 - Prob. 11DQCh. 16 - How do income taxes affect the break-even point...Ch. 16 - Explain how a change in sales mix can change a...Ch. 16 - Explain how a change in sales mix can change a...Ch. 16 - Prob. 15DQCh. 16 - Prob. 1CECh. 16 - Prob. 2CECh. 16 - Health-Temp Company is a placement agency for...Ch. 16 - Olivian Company wants to earn 420,000 in net...Ch. 16 - Vandenberg, Inc., produces and sells two products:...Ch. 16 - Prob. 6CECh. 16 - Prob. 7CECh. 16 - Prob. 8ECh. 16 - Gelbart Company manufactures gas grills. Fixed...Ch. 16 - Schylar Pharmaceuticals, Inc., plans to sell...Ch. 16 - Prob. 11ECh. 16 - Prob. 12ECh. 16 - Big Red Motors, Inc., employs 15 sales personnel...Ch. 16 - Sports-Reps, Inc., represents professional...Ch. 16 - Campbell Company manufactures and sells adjustable...Ch. 16 - Prob. 16ECh. 16 - Sara Pacheco is a sophomore in college and earns a...Ch. 16 - Carmichael Corporation is in the process of...Ch. 16 - Choose the best answer for each of the following...Ch. 16 - Prob. 20ECh. 16 - Income statements for two different companies in...Ch. 16 - Prob. 22ECh. 16 - Prob. 23ECh. 16 - Busy-Bee Baking Company produces a variety of...Ch. 16 - Prob. 25ECh. 16 - Jester Company had unit contribution margin on...Ch. 16 - Loessing Company produced and sold 12,000 units...Ch. 16 - Junior Company has a breakeven point of 34,600...Ch. 16 - Prob. 29ECh. 16 - If a companys variable cost per unit increases,...Ch. 16 - Prob. 31PCh. 16 - More-Power Company has projected sales of 75,000...Ch. 16 - Consider the following information on four...Ch. 16 - Hammond Company runs a driving range and golf...Ch. 16 - Prob. 35PCh. 16 - Faldo Company produces a single product. The...Ch. 16 - Katayama Company produces a variety of products....Ch. 16 - Prob. 38PCh. 16 - Prob. 39PCh. 16 - Prob. 40PCh. 16 - Salem Electronics currently produces two products:...Ch. 16 - Good Scent, Inc., produces two colognes: Rose and...
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