CVP Analysis - Toy Ltd

Fixed Variable

-Production costs

Direct materials $3.00

Direct labour $3.50

Factory Overhead $150,000 $1.50

- Selling Expenses

Sales salaries and commissions $62,000 $2.50

Advertising $53,200

Miscellaneous selling $8,900

$8,900

-General Expenses

Office salaries $9,600

Supplies $27,000 $2.50

Miscellaneous general $22,600

Ignore income tax.

Required:

Calculate the following.

a)The contribution margin per unit if the selling price is $19 per unit.

b) The contribution margin ratio.

c) The breakeven point in units and in dollar amount.

d) The number of units to be sold for the company to make a profit of $10,000.

e) The net income based on budgeted sales of 90,000 units.

f) The safety margin (in dollar amount) based on the budgeted sales of 90,000 units.