Ashley Furniture provided the following data for next month: Per
unit Selling price Direct materials $80 $25 Direct labour $12
Variable overhead $7 Variable marketing expense $4 Fixed marketing
expense totals $125,000 and fixed manufacturing expenses total
$155,000. Required (A) What is the contribution margin per unit?
(B) What is the contribution margin ratio? (C)In your own words,
describe what the terms contribution margin per unit and
contribution margin ratio mean, and describe the difference(s)
between these two concepts. (D)What is the variable product cost
per unit? (E) What is the breakeven point in units? Sales dollars?
(F) Assume original facts and sales are currently 10,500 units.
Compute the margin of safety in dollars and units. (G) Assume
original facts and sales are currently 10,500 units. Compute the
amount of operating leverage. (H)Why is the breakeven point an
important concept in management accounting? That is, what
information does it provide managers? (You may wish to look at a
variety of sources of information (e.g., online) to find suitable
answers for this question. If so, be certain to include appropriate
citations.) (I) How many units must the company sell to earn a
target income of $116,000? 6 (J) Henry Payne, marketing manager,
proposed the company increase the advertising budget by $40,000. He
suggests this would increase sales by 1,500 units. Should the
advertising budget be increased? You do not need to prepare an
income statement
Ashley Furniture provided the following data for next month: Per unit Selling price Direct materials $80 $25 Direct labo
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