35.
At a break-even point of 400 units, variable costs were $400 and fixed costs were $200.
What will the 401st unit sold contribute to operating profits before income taxes?
3-22
36.
Dartmount Corporation has provided its contribution format income statement for June.
The company produces and sells a single product.
Sales (2,900 units)
$269,700
Variable costs
107,300
Contribution margin
162,400
Fixed costs
137,100
Operating profit
$25,300
Sales (3,100 units)*
$288,300
Variable costs
Contribution margin
Fixed costs
Operating profit
37.
Goodson Inc. produces and sells a single product. The company has provided its
contribution format income statement for March.
Sales (4,500 units)
$427,500
Variable costs
265,500
Contribution margin
162,000
Fixed costs
135,300
Operating profit
$26,700
Sales (4,300 units)*
$408,500
Variable costs
253,700
Contribution margin
154,800
Fixed costs
135,300
Operating profit
$19,500
38.
The contribution margin ratio is 25% for Crowne Company and the break-even point in
sales is $200,000. If Crowne Company’s target operating profit is $60,000, sales would
have to be:
39.
Opal Company manufactures a single product that it sells for $90 per unit and has a
contribution margin ratio of 35%. The company’s fixed costs are $46,800. If Opal desires a
monthly target operating profit equal to 15% of sales, sales will have to be (rounded):
40.
Razor Inc. manufactures industrial components. One of its products used as a
subcomponent in auto manufacturing is Fluoro2211. The selling price and cost per unit
data for 9,000 units of Fluoro2211 are as follows.
Per Unit Data
Selling Price
$150
Direct Materials
20
Direct Labor
15
Variable Manufacturing Overhead
12
Fixed Manufacturing Overhead
30
Variable Selling
3
Fixed Selling and Administrative
10
Total Costs
90
Operating Margin
$60
41.
42.
43.
44.
45.
Lamar has the following data:
Selling Price
$40
Variable manufacturing cost
$22
Fixed manufacturing cost
$150,000
per
month
Variable selling &
administrative costs
$6
Fixed selling & administrative
costs
$120,000
per
month
How many units must Lamar produce and sell in order to break-even?
46.
Lamar has the following data:
Selling Price
$40
Variable manufacturing cost
$22
Fixed manufacturing cost
$150,000
per
month
Variable selling &
administrative costs
$6
Fixed selling & administrative
costs
$120,000
per
month
How many units must Lamar produce and sell in order to achieve a profit of $30,000 per
month?
47.
Lamar has the following data:
Selling Price
$40
Variable manufacturing cost
$22
Fixed manufacturing cost
$150,000
per
month
Variable selling &
administrative costs
$6
Fixed selling & administrative
costs
$120,000
per
month
If Lamar produces and sells 30,000 units, what is the margin of safety in units?
3-34
48.
Gardner Corporation manufactures skateboards and is in the process of preparing next
year’s budget. The pro forma income statement for the current year is presented below.
Sales
$1,500,000
Cost of sales:
Direct Material
$250,000
Direct labor
150,000
Variable Overhead
75,000
Fixed Overhead
100,000
575,000
Gross Profit
$925,000
Selling and G&A
Variable
200,000
Fixed
250,000
450,000
Operating Income
$475,000
49.
Gardner Corporation manufactures skateboards and is in the process of preparing next
year’s budget. The pro forma income statement for the current year is presented below.
Sales
$1,500,000
Cost of sales:
Direct Material
$250,000
Direct labor
150,000
Variable Overhead
75,000
Fixed Overhead
100,000
575,000
Gross Profit
$925,000
Selling and General &
Admin. Exp.
Variable
200,000
Fixed
250,000
450,000
Operating Income
$475,000
50.
You have been provided with the following information:
Per Unit
Total
Sales
$15
$45,000
Less variable expenses
9
27,000
Contribution margin
6
18,000
Less fixed expenses
12,000
Operating profit
$6,000
If sales decrease by 500 units, how much will fixed costs have to be reduced by to
maintain the current operating profit of $6,000?
51.
Raines Company’s sales are $750,000 with operating profits of $130,000. If the
contribution margin ratio is 40%, what did the fixed costs amount to?
3-38
52.
The following costs have been estimated based on sales of 30,000 units:
Total
Annual
Costs
Percent That
Is Variable
Direct materials
$300,000
100%
Direct labor
250,000
100
Manufacturing
overhead
250,000
50
Selling and
administrative
150,000
25
53.
54.
At the break-even point, the total contribution margin equals total: (CPA adapted)