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
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...