Suppose Company A had sold 125,000 units during the year, instead of the 120,000 units in the table. Using each of the three analysis methods just explained, determine Company A’s operating profit at the 125,000 units sales volume level. Assume other profit factors remain the same.
|
Company A |
||
|
Totals |
Per Unit |
|
|
Sales volume, in units |
120,000 |
|
|
Sales revenue |
$24,000,000 |
$200.00 |
|
Cost of goods sold expense |
$15,600,000 |
$130.00 |
|
Gross margin |
$8,400,000 |
$70.00 |
|
Variable operating expenses |
$3,600,000 |
$30.00 |
|
Contribution margin |
$4,800,000 |
$40.00 |
|
Fixed operating expenses |
$3,000,000 |
$25.00 |
|
Operating profit |
$1,800,000 |
$15.00 |