Accounts
posted by Amy .
A manufacturing Company produces 2 products – A and B.
The following information is presented for both products:
A
B
Selling Price per unit
$18
$12
Variable Cost per unit
$14
$6
Total Fixed Costs are $468,000.
Compute:
The contribution margin for each product.
Breakeven point in units of both A and B if the sales mix is 3 units of A for every unit of B.
Breakeven volume in total dollars if the sales mix is 2 units of A for every 3 units of B.
Question 2
Davis Manufacturing gathered the following information:
Variable Costs $630,000
Income Tax Rate 40%
Contribution Margin Ratio 30%
Required:
Compute total fixed costs assuming a breakeven volume in dollars of $900,000.
Compute sales volume in dollars to produce an aftertax net income of $72,000.
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