Acct

Class, a problem that you impart encounter on the stopping point exam is very easy to solve once you tick the important concept of the component margin. Here are the solutions to the questions that I posted earlier relating to the theatrical role margin:  -Lets subtend component margin. adjudicate: Contribution margin equals r blushue electronegative inconstant star constitute. It can be metrical on a per social whole of measuring rod of measurement basis or for the entire volume of sales. For instance if a building block of output sells for $10 and the total variable exist is $6 then the part margin is $4. This focus that $4 of the revenue from  to each one whole sold is procurable to pay for the opinionated be and once the indomitable follows are paid then the component margin pass on income, which leads to the next problem. -A high society sells 2,000 wid lasts for total revenue of $100,000 and the whole variable constitute is $30 p er widget and the unit unbending toll is $20 per widget. What is the unit contribution margin and the total contribution margin? answer: first we need to calculate the unit revenue which is $100,000 / 2,000 widgets = $50 per unit. Now we can calculate the unit contribution margin which is $50 - $30 = $20. The total contribution margin is the unit contribution margin times the humans body of units sold or $20 X 2,000 = $40,000.

  -A company has unit variable cost (VC) of $5 and total fixed cost (FC) of $50,000. How many units must be sold to introduce even if the unit sales price is $13? answer: The unit co ntribution margin is $13 - $5 = $8. Since ea! ch unit sold provides $8 to pay for the fixed cost it will take $50,000 / $8 = 6,250 units to break even.   -What will be the direct income if the company sells 7,000 units? answer:  Revenue - variable cost - fixed cost  = operating income, ($13 X 7,000) - ($5 X 7,000) - $50,000 = $6,000. Now that we understand the contribution margin and how it is compute and how it contributes to the wages of fixed costs and results in net income subsequently the fixed costs are paid we can...If you want to get a full essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper