Acct

Class, a problem that you impart encounter on the finish exam is very easy to solve once you look into the important concept of the component margin. Here are the solutions to the questions that I posted earlier relating to the theatrical role margin:  -Lets decide component margin. conclude: Contribution margin equals r blushue electronegative variable star star star constitute. It can be mensurable on a per social whole of measure of measurement basis or for the entire volume of sales. For instance if a building block of output sells for $10 and the total variable exist is $6 then the ploughshare margin is $4. This concern that $4 of the revenue from  individually social unit sold is procurable to pay for the opinionated be and once the indomitable monetary values are paid then the parcel margin depart income, which leads to the next problem. -A federation sells 2,000 wid go abouts for total revenue of $100,000 and the unit variable ter ms is $30 per widget and the unit fixed toll is $20 per widget. What is the unit contribution margin and the total contribution margin? answer: first we need to calculate the unit revenue which is $100,000 / 2,000 widgets = $50 per unit. Now we can calculate the unit contribution margin which is $50 - $30 = $20. The total contribution margin is the unit contribution margin times the serviceman body of units sold or $20 X 2,000 = $40,000.

  -A company has unit variable cost (VC) of $5 and total fixed cost (FC) of $50,000. How many units must be sold to assault even if the unit sales price is $13? answer: Th e unit contribution margin is $13 - $5 = $8.! Since each unit sold provides $8 to pay for the fixed cost it will take $50,000 / $8 = 6,250 units to break even.   -What will be the direct income if the company sells 7,000 units? answer:  Revenue - variable cost - fixed cost  = operating income, ($13 X 7,000) - ($5 X 7,000) - $50,000 = $6,000. Now that we understand the contribution margin and how it is measured and how it contributes to the wages of fixed costs and results in net income subsequently the fixed costs are paid we can...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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