Effect of Contribution Margin on the other costs is given below
Explanation:
1.Contribution margin per unit is the net amount that each additional unit sold contributes towards a company's fixed costs and profit. It equals the difference between the product's sales price and variable cost per unit.It represents the incremental money generated for each product/unit sold after deducting the variable portion of the firm's costs.Also known as dollar contribution per unit, the measure indicates how a particular product contributes to the overall profit of the company. It provides one way to show the profit potential of a particular product offered by a company and shows the portion of sales that helps to cover the company's fixed costs. Any remaining revenue left after covering fixed costs is the profit generated.
2.The Formula for Contribution Margin Is
The contribution margin is computed as the difference between the sale price of a product and the variable costs associated with its production and sales process.
Contribution Margin=Sales Revenue - Variable Costs
3.The contribution margin is the foundation for break-even analysis used in the overall cost and sales price planning for products. The contribution margin helps to separate out the fixed cost and profit components coming from product sales and can be used to determine the selling price range of a product, the profit levels that can be expected from the sales, and structure sales commissions paid to sales team members, distributors or commission agents.
4,The contribution margin represents the portion of a product's sales revenue that isn't used up by variable costs, and so contributes to covering the company's fixed costs.
The concept of contribution margin is one of the fundamental keys in break-even analysis.
Low contribution margins are present in labor-intensive companies with few fixed expenses, while capital-intensive, industrial companies have higher fixed costs and thus, higher contribution margins
Answer:
$34.8
Explanation:
Profits = sales - costs( variable costs +fixed costs)
In this case : total sales will be price $0.75 x units sold X= 0.75X
Variable costs : =$10 x units sold= $10x
Fixed cost remain $25 as they are not affected by quantity.
profits for the Week
P= (0.75x- 0.10x)-$25
Profit for the week with units sold as 92: x = 92
p= ( {0.75x92} - {0.10x92} )- $25
P= $69 - $9.2- $25
P=$59.8- $25
=$34.8
Answer:
The adjusting journal entry to record bad debt expense for the year:
Debit Bad debts expense $13,831
Credit Allowance for doubtful accounts $13,831
Explanation:
Blossom Company uses the percentage-of-receivables basis to record bad debt expense.
At the end of the year, Accounts receivable are $419,300 and 4% of accounts receivable will become uncollectible.
Estimated uncollectible = $419,300 x 4% = $16,772
Before adjusting, the allowance for doubtful accounts has a credit balance of $2,941.
Bad debts expense = $16,772 - $2,941 = $13,831
The adjusting journal entry:
Debit Bad debts expense $13,831
Credit Allowance for doubtful accounts $13,831
Answer:
Please see attached detailed explanation.
Explanation:
Please find attached detailed preparation of income statement, balance sheet and cash flow statement for the above.
