acct640 chapter 3 homework 495994
Aug 29, 2021  Uncategorized
Last month when Harrison Creations, Inc., sold 40,000 units, total sales were $300,000, total variable expenses were $240,000, and fixed expenses were $45,000. 
Required: 
1. 
What is the company s contribution margin (CM) ratio?

2. 
Estimate the change in the company s net operating income if it were to increase its total sales by $1,500.
Maxson Products distributes a single product, a woven basket whose selling price is $8 and whose variable cost is $6 per unit. The company s monthly fixed expense is $5,500.
1. 
Compute for the company s breakeven point in unit sales using the equation method.
2. 
Compute for the company s breakeven point in sales dollars using the equation method and the CM ratio.



3. 
Compute for the company s breakeven point in unit sales using the formula method.
4. 
Compute for the company s breakeven point in sales dollars using formula method and the CM ratio
Mohan Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning next month s budget appear below:




Selling price 
$25 
per unit 
Variable expenses 
$15 
per unit 
Fixed expenses 
$8,500 
per month 
Unit sales 
1,000 
units per month 

Required: 
1. 
Compute the company s margin of safety.
2. 
Compute the company s margin of safety as a percentage of its sales.




