Discover the answers you need at Westonci.ca, a dynamic Q&A platform where knowledge is shared freely by a community of experts. Experience the ease of finding reliable answers to your questions from a vast community of knowledgeable experts. Get precise and detailed answers to your questions from a knowledgeable community of experts on our Q&A platform.
Sagot :
Answer and Explanation:
a. The preparation of the contribution margin income statement is presented below
Sales (36,300 × $400) $14,520,000
Less: variable cost (36,300 × $224) $8,131,200
Contribution margin $6,388,800
Less: fixed cost - $5,935,750
net income $453,050
b. The break even point is
In units
= Fixed cost ÷ contribution margin per unit
= $5,935,750 ÷ ($400 - $224)
= 33,726 units
In dollars
= Fixed cost ÷ contribution margin ratio
= $5,935,750 ÷ ($176 ÷ $400)
= $13,490,341
c. The margin of safety
In units
= Total sales units - break even units
= 36,300 - 33,726
= 2,574 units
In dollars
= Total sales - break even sales
= $14,520,000 - $13,490,341
= $1,029,659
We hope you found this helpful. Feel free to come back anytime for more accurate answers and updated information. We hope this was helpful. Please come back whenever you need more information or answers to your queries. Westonci.ca is here to provide the answers you seek. Return often for more expert solutions.
