Trevino Company makes and sells products with variable costs of $24 each Trevino incurs annual fixed costs
Question:
Trevino Company makes and sells products with variable costs of $24 each Trevino incurs annual fixed costs of $315,000 The current sales price is $87e If fixed costs drop to $280,000,
a. Determine the contribution margin per unit.
b-1.Determine the break-even point in units and in dollars.
b-2.Prepare an income statement using the contribution margin format.
c-1.Suppose that Trevino desires to earn a $252,000 profit. Determine the sales volume in units and dollars required to earn the desired profit.
c-2.Prepare an income statement using the contribution margin format.
d-1. If the sales price drops to $80 per unit, what level of sales is required to earn the desired profit? Express your answer in units and dollars.
d-2Prepare an income statement using the contribution margin format.
e-1.If fixed costs drop to $280,000, what level of sales is required to earn the desired profit? Express your answer in units and dollars.
e-2. Prepare an income statement using the contribution margin format.
f-1. If variable cost rises to $30 per unit, what level of sales is required to earn the desired profit? Express your answer in units and dollars.
f-2. Prepare an income statement using the contribution margin format.
g. Assume that Trevino concludes that it can sell 10,000 units of product for $80 each. Recall that variable costs are $30 each and fixed costs are $280,000. Compute the margin of safety in units and dollars and as a percentage.
Fundamental Managerial Accounting Concepts
ISBN: 978-1259569197
8th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor-Yi Tsay, Philip Olds