Question

Newman Company expects to produce and sell 2,000 units next month. Data on costs follows: Per Unit: Sales Price $40 Manufacturing Variable Cost $10 Selling Variable Cost $6 8. Total Costs: Fixed Manufacturing $16,000 Fixed Selling $8,000 A. What is the variable cost per unit? B. what is the contribution margin per unit? C. what is the variable cost ratio? D. What is the contribution margin ratio?
0 0
Add a comment Improve this question Transcribed image text
Answer #1

A. Manufacturing Variable Cost $10

+ Selling Variable Cost    $6

Variable Cost Per Unit $16   

B. Sales Price Per unit $40

Less: Variable Cost Per unit(From A) ( $16)   

Contribution Margin Per unit $24   

C. Variable Cost ratio = Total Variable Cost

sales

= $16 / $40 = 0.40 or 40%

D.Contribution Margin Ratio = Contribution Margin   

Sales

= $24 / $40 = 0.60 or 60%

Add a comment
Know the answer?
Add Answer to:
Newman Company expects to produce and sell 2,000 units next month. Data on costs follows: Per...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • 3. Cole Co. plans to sell 12,000 units per month. The estimated units costs for Cole...

    3. Cole Co. plans to sell 12,000 units per month. The estimated units costs for Cole Co. are as follows: Estimated Cost Item Unit Cost Direct materials $32 Direct labor 20 Variable manufacturing overhead 15 Fixed manufacturing overhead 6 Variable selling 3 Fixed selling 4 a. What is Cole's estimated total variable costs per unit? 70 b. Suppose Cole estimates to produce 12,000 units and sell 8,000 units during a month. What are Cole's estimated total costs?

  • Assume Sparkle Co. expects to sell 150 units next month. The unit sales price is $100,...

    Assume Sparkle Co. expects to sell 150 units next month. The unit sales price is $100, unit variable cost is $40, and the fixed costs per month are $5,000. The margin of safety in terms of sales revenue is: Round to two decimal places. Your Answer: Question 7 options: Answer

  • Question 7 (1 point) Assume Sparkle Co. expects to sell 150 units next month. The unit...

    Question 7 (1 point) Assume Sparkle Co. expects to sell 150 units next month. The unit sales price is $100, unit variable cost is $40, and the fixed costs per month are $5,000. The margin of safety in terms of sales revenue is: Round to two decimal places. Your Answer: Answer

  • A firm expects to sell 25,200 units of its product at $11.20 per unit and to...

    A firm expects to sell 25,200 units of its product at $11.20 per unit and to incur variable costs per unit of $6.20. Total fixed costs are $72,000. The total contribution margin is: Watson Company has monthly fixed costs of $74,000 and a 50% contribution margin ratio. If the company has set a target monthly income of $14,100, what dollar amount of sales must be made to produce the target Income?

  • Harrison Co. expects to sell 150,000 units of its product next year, which would generate total...

    Harrison Co. expects to sell 150,000 units of its product next year, which would generate total sales of $12,000,000. Management predicts that pretax net income for next year will be $1,200,000 and that the contribution margin per unit will be $30. Harrison Co. expects to sell 150,000 units of its product next year, which would generate total sales of $12,000,000. Management predicts that pretax net income for next year will be $1,200,000 and that the contribution margin per unit will...

  • The estimated unit costs for a company to produce and sell aproduct at a level...

    The estimated unit costs for a company to produce and sell a product at a level of 12,000 units per month are as follows: Cost Item Estimated Unit Cost Direct material $ 32 Direct labor 20 Variable manufacturing overhead 15 Fixed manufacturing overhead 6 Variable selling expenses 3 Fixed selling expenses 4 What are the estimated conversion costs per unit?

  • The estimated unit costs for a company to produce and sell a product at a level...

    The estimated unit costs for a company to produce and sell a product at a level of 13,800 units per month are as follows:    Cost Item Estimated Unit Cost Direct material $ 37 Direct labor 25 Variable manufacturing overhead 22 Fixed manufacturing overhead 9 Variable selling expenses 3 Fixed selling expenses 4 What are the estimated variable costs per unit? $87 $50 $84 $62

  • The estimated unit costs for a company to produce and sell a product at a level...

    The estimated unit costs for a company to produce and sell a product at a level of 13,600 units per month are a Cost Item Estimated Unit Cost $ 35 Direct material Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses What are the estimated variable costs per unit?

  • Harrison Co. expects to sell 250,000 units of its product next year, which would generate total...

    Harrison Co. expects to sell 250,000 units of its product next year, which would generate total sales of $22,500,000. Management predicts that pretax net income for next year will be $1,300,000 and that the contribution margin per unit will be $20. Complete the below table to calculate the next year's total expected variable costs and fixed costs. HARRISON CO. Forecasted Contribution Margin Income Statement $ per unit Units Sales 250,000 Contribution margin 20 0

  • KCSB expects to produce and sell 2,200 bicycles per month in the coming year. The bicycles...

    KCSB expects to produce and sell 2,200 bicycles per month in the coming year. The bicycles sell for $630 each. An outside contractor makes an offer to assemble 750 of KCSB's bicycles per month and ship them directly to KCSB's customers as orders are received from its sales force. It will charge KCSB $155 per bicycle. KCSB would provide the materials for each bicycle, but the outside contractor would assemble, box, and ship the bicycles. If KCSB accepts the offer,...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT