ACCT $254$ Module $3$ Assignment

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ACCT $254$ Module $3$ Assignment

The following information is for a product manufactured and sold by Drake Company:

Sales price per unit: $$200$

Variable cost per unit: $$60$

Total annual fixed costs: $$700,000$

Required:

Calculate the contribution margin per unit.

How many units must Crane sell to break$-$even?

How many units must Crane sell to achieve a profit of $$35,000?$

Heavener Company produces and sells storage sheds. Its current sales are $$500,000.$ The company's accountant provided the following cost information:

$\backslash$table$[[$Manufacturing costs,$$100,000+40\%$ of sales$],[$Selling costs,$$30,000+10\%$ of sales$],[$Administrative costs,$$45,000+10\%$ of sales$]]$

Required:

Compute the product's contribution margin ratio.

Compute the company's current net income.

Compute the product's break$-$even point in dollars.

Compute the amount of revenue necessary to earn $$60,000$ in profit.

Compute the company's current margin of safety ratio.

Should the company accept a proposal that increases sales by $20\%$ and total fixed costs by $25\%?$