Question

eren US Vio E 4+ AaBbCcDdEe Аавьссе A A A ASA. E T $. Normal =E No Spacit Question 2 A cement manufacturer has supplied the following data: Tons of cement produced and sold .............. Sales revenue ................. Variable manufacturing expense............. Fixed manufacturing expense.. .. Variable selling and administrative expense Fixed selling and administrative expense..... Net operating income... 260,000 $1,118,000 $429,000 $288,000 $91,000 $228,000 $82,000 Required: a. What is the company's unit contribution margin? b. What is the company's contribution margin ratio? c. If the company increases its unit sales volume by 3% without increasing its fixed expenses, what will total net operating income be? sh (US)

Answer 1

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Statementshowing Computations
Paticulars	Amount
Sales	1,118,000.00
Less Variable Expenses
Variable manufacturing Expenses	429,000.00
Variable selling and admin Expenses	91,000.00
Totaal Variable costs	520,000.00
a) Contribution Margin = Sales - VC	598,000.00
b) Contribution Margin Ratio =598,000/1118,000	53.49%
c)
New Contribution =598,000*103%	615,940.00
Less Fixed expenses
Fixed manufacturing Expenses	288,000.00
Fixed selling and admin Expenses	228,000.00
Total fixed costs	516,000.00
Net operating income	99,940.00
Q3
Sales price per unit	12.00
Variable cost per unit	8.00
Contribution per unit	4.00
Fixed costs	400,000.00
Target Profit	80,000.00
Target contribution	480,000.00
No of units to be sold = 480,000/4	120,000.00