Q 6

A. Determine the missing amounts( 1 .5 marks)

S.No

Unit Selling Price

Unit Variable Cost

Contribution Margin per unit

Contribution Margin Ratio

1

2

3

550

1500

(e)

370

(c)

(f)

(a)

600

900

(b)

(d)

30

B. For Al Farabi Company, variable costs are 75% of sales, and fixed costs are $210,000.Managements net income goal is $70,000. Compute the required sales needed to achieve managements target net income of $70,000. (Use the mathematical equation approach.) ( 1 .5 marks)

C. Company As costs are mostly variable, whereas Company Bs costs are mostly fixed. When sales increase, which company will tend to realize the greatest increase in profits? Explain. (2 Marks)