Answer and Explanation:
The computation is shown below:
1. Given that
Break even point units 115000 units
Fixed cost = $349,600
As we know that
CM per unit is
= Fixed cost ÷ Break even units
= $349,600 ÷ 115,000
= 3.04 per unit
Now
Selling price = Variable cost +CM per unit
= $4.56 + $3.04
= $7.60 per unit
2. Given that
Net Income at 15600 units is $166,000
Fixed cost = $458,000
So,
Contribution is
= $458,000 + $166,000
= $624,000
Now
CM per unit is
= $624,000 ÷ 15,600
= 40 per unit
Selling price per unit: 120
So,
Variable cost per unit is
= $120 - 40
= 80 per unit
And,
CM ratio is
= CM per unit ÷ Selling price per unit
= $40 ÷ 120 × 100
= 33.33%
3. Given that
Net Operating income = $22,500
CM ratio = 25%
Actual revenue = $235,000
So,
Contribution earned is
= $235,000 × 25%
= $58,750
Now
Fixed cost = Contribution - Net income
= $58,750 - $22,500
= $36,250
4. Given that
Variable cost ratio = 56%
Fixed cost = $103,840
Break even units= 23600 units
So,
CM per unit is
= $103,840 ÷ 23,600
= $4.40
CM ratio = 100 - 56% = 44%
And, the Selling price per unit is
= $4.40 ÷ 44%
= $10 per unit
Now
Variable cost per unit is
= $10 × 56%
= $5.60 per unit
And,
Contribution per unit is
= $10 × 44%
= $4.40 per unit
