Stormiez Camping Supply sells tents. The company has the following income statement. Sales ($1,000 per unit) $200,000
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Question:
Stormiez Camping Supply sells tents. The company has the following income statement.
Sales ($1,000 per unit) | $200,000 | |
Less Cost of Goods sold ($475 per unit) | 95,000 | |
Gross margin | 105,000 | |
Less Operating costs | ||
Salaries | $40,000 | |
Advertising | 10,000 | |
Sales commissions ($5 per unit) | 1,000 | |
Shipping ($20 per unit) | 4,000 | 55,000 |
Operating income | $ 50,000 |
Required:
a. What is the contribution margin per unit?
b. What is the contribution margin ratio?
c. What is the breakeven point in units? In sales dollars?
d. What is the margin of safety in units? In dollars?
Expert Answer:
a The contribution margin per unit is calculated by subtracting the variable cost per unit from the ... View the full answer
Related Book For 
Managerial Accounting Tools for Business Decision Making
ISBN: 978-1118033890
3rd Canadian edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly
Posted Date:
