Respuesta :
wonder company manufactures one product that sells for $90 per unit and has a contribution margin ratio of 35%.
The steps are listed below.
Providing the following details:
Sales= $640,000 ($40)
Total variable costs = 448,000 (28)
Margin of contribution = 192,000 ($12).
Fixed costs = (145,200)
$46.800 in net operating income
1) Use the following calculations to get the break-even point in units and dollars:
Break-even point in units = contribution margin per unit minus fixed costs
Break-even point equals 145,200 units (40-28)
Break-even point equals 12,100 units in units.
Fix expenses divided by contribution margin ratio is the break-even point in dollars.
Break-even point (12/40) = 145,200 dollars
The break-even mark is equal to $484,000.
2) The break-even point is the quantity of units that must be sold to generate a zero net profit. Since fixed costs cannot be changed, the contribution margin must match them.
Margin of contribution = 145,200
3) Gain = $75,600
Break-even point in units = contribution margin per / (fixed expenses + targeted profit)unit
Break-even point is 220,800/12 in units.
Break-even point equals 18,400 units in units.
Sales= 18,400*40= 736,000
Total variable expenses are 18,400*28. (515,200)
Margin of contribution = 220,800
145,200 in fixed costs
75,600 is the net profit
4) The safety margin
Risk of error = (current sales level - break-even point)
Margin of safety is equal to 640,000 - 484,000, or $156,000.
Break-even point divided by current sales level is the margin of safety ratio manufacture.
Ratio of the safety margin = 156,000 to 640,000
0.244 times the margin of safety equals 24.4%.
5) Ratio of contribution margin: 12/40 = 0.3
Net growth equals 96,000*0.3, or $28,800.
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