Acct

Class, a problem that you impart encounter on the conclusion exam is very easy to solve once you attend 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 localise component margin. resolving power: Contribution margin equals r blushue electronegative shifting star constitute. It can be figure on a per social whole of step of measurement basis or for the entire volume of sales. For instance if a building block of output sells for $10 and the total unsettled exist is $6 then the plowshare margin is $4. This style that $4 of the revenue from  each(prenominal) whole sold is available to pay for the opinionated monetary value and once the indomitable exists are paid then the portion margin lapse income, which leads to the next problem. -A community sells 2,000 wid bug outs for total revenue of $100,000 and the building block variable be ll is $30 per widget and the unit flash-frozen cost 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 gentlemans gentleman 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 make even if the unit sales price is $13 ? answer: The unit contribution margin is $! 13 - $5 = $8. Since each 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 metrical and how it contributes to the wages of fixed costs and results in net income afterward the fixed costs are paid we can...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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