Questions:
1. Compute and interpret the contribution margin ratio using the following data: sales, $150,000; total variable cost, $90,000.
2. MCU Phone Company sells its cordless phone for $300 per unit. Fixed costs total $540,000, and variable costs are $120 per unit. Determine the (1) contribution margin per unit and (2) break-even point in units.
3. MCU Phone Company sells its cordless phone for $300 per unit. Fixed costs total $540,000, and variable costs are $120 per unit. Determine the (1) contribution margin per unit and (2) break-even point in units.
4. How will the break-even point in units change in response to each of the following independent changes in selling price per unit, variable cost per unit, or total fixed costs? Use I for increase and D for decrease. (It is not necessary to compute new break-even points.)
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Change
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Break-even in Units Will
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1Total fixed cost to $520,000
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__________
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2Variable cost to $134 per unit
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3 Selling price per unit to $290
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4Variable cost to $100 per unit
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5Total fixed cost to $544,000
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6 Selling price per unit to $320
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