A cement manufacturer has supplied the following data: Tons of cement produced and sold 220,000 Sales revenue
Question:
A cement manufacturer has supplied the following data: Tons of cement produced and sold 220,000
Sales revenue ...........$924,000
Variable manufacturing expense ...$297,000
Fixed manufacturing expense .....$280,000
Contribution Margin........$347,000
Variable selling and admin expense..$165,000
Fixed selling and admin expense .....$82,000
Net operating income ........$100,000
Required:
a. Calculate the company's unit Contribution Margin
b. Calculate the company's unit contribution ratio
c. If the company increases its unit sales volume by 5% without increasing its fixed expenses, what would the company's net operating income be?
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...
Step by Step Answer:
Cost Accounting A Managerial Emphasis
ISBN: 978-0133392883
6th Canadian edition
Authors: Horngren, Srikant Datar, George Foster, Madhav Rajan, Christ