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Concept explainers
Price, Variable Cost per Unit, Contribution Margin, Contribution Margin Ratio, Fixed Expense
For each of the following independent situations, calculate the amount(s) required.
Required:
1. At the break-even point, Jefferson Company sells 105,000 units and has fixed cost of $351,300. The variable cost per unit is $0.30. What price does Jefferson charge per unit? Note: Round to the nearest cent.
$
2. Sooner Industries charges a price of $119 and has fixed cost of $408,500. Next year, Sooner expects to sell 16,300 units and make operating income of $174,000. What is the variable cost per unit? What is the contribution margin ratio? Note: Round your variable cost per unit answer to the nearest cent. Enter the contribution margin ratio as a percentage, rounded to two decimal places.
| Variable cost per unit | $ | |
| Contribution margin ratio | % |
3. Last year, Jasper Company earned operating income of $27,720 with a contribution margin ratio of 0.3. Actual revenue was $231,000. Calculate the total fixed cost. Note: Round your answer to the nearest dollar, if required.
$
4. Laramie Company has variable cost ratio of 0.35. The fixed cost is $185,900 and 26,000 units are sold at break-even. What is the price? What is the variable cost per unit? The contribution margin per unit? Note : Do NOT round interim computations. Round answers to the nearest cent.
| Price | $ |
| Variable cost per unit | $ |
| Contribution margin per unit | $ |
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