Change Initiative: Creating Vision
April 4, 2021
Project Communication Management Plan management homework help
April 4, 2021

Assignment
#2: 

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
reading material:

Sales = Variable expenses + Fixed
expenses +Profit

Sales = Quantity * Units

Profit = (Sales × CM ratio) – Fixed
Cost

Review
Problems : Contribution margin and ratio

Problem
1: 

Sales per unit = $250

Variable Cost per unit = $150

Units = 350

  1. Calculate Contribution Margin Per Unit (2 points)
  2. Calculate Contribution Margin (CM) Ratio Per Unit (3
    points)
  3. Calculate Total Contribution Margin (CM) Dollars (5
    points)

Problem
2: 

Sales = $5,000,000

CM Ratio = 0.40

Fixed cost = $1,600,000

  1. Calculate Profit.

Problem 3: 

A company has budgeted sales of $200,000, a
profit of $60,000 and fixed expenses of $40,000.

  1. Calculate contribution margin ratio.

Review
Problem : Break-even point

Problem 4: 

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)
Sales $1,200,000 $60 100%
Less variable expenses 900,000 45 ?%
  ——– ——– ——–
Contribution margin 300,000 15 ?%
Less fixed expenses 240,000 ====== ======
  ——–    
Net operating income $60,000    
  ======    
  1. What is the Contribution Margin (CM) Ratio (or percent
    of sales)? (5 points)
  2. Calculate break-even point both in total units and
    total sales dollars. (10 points)

Problem 5: 

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.

  1. How many units will have to be sold to meet the target
    profit figure?

 

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