Show your work to get any partial
credit. Give me the formula that you might use or show other thought
process. If you just give me an answer and it’s not the right one, you will get
zero points for that question.
Other formulas needed outside of the
Sales = Variable expenses + Fixed
Sales = Quantity * Units
Profit = (Sales × CM ratio) – Fixed
Problems : Contribution margin and ratio
Sales per unit = $250
Variable Cost per unit = $150
Units = 350
Sales = $5,000,000
CM Ratio = 0.40
Fixed cost = $1,600,000
A company has budgeted sales of $200,000, a
profit of $60,000 and fixed expenses of $40,000.
Problem : Break-even point
Voltar Company manufactures and
sells a telephone answering machine. The company’s contribution format income
statement for the most recent year is given below:
|Total||Per unit||Pct. of sales (Ratios)|
|Less variable expenses||900,000||45||?%|
|Less fixed expenses||240,000||======||======|
|Net operating income||$60,000|
Management is anxious to improve the
company’s profit performance. Assume that next year management wants the
company to earn a minimum profit of $90,000.
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