Bus 630 Week 1
(1) Estimated contribution margins for the next fiscal quarter (000s omitted): Computer Place Poster Paper Napkins Mats Board Total Number of units 30 120 45 80 275 Sales $420 $840 $540 $680 $2,480 Cost of goods sold: Variable costs 225 612 270 360 1,467 Contribution margin $195 $228 $270 $320 $1,013 Unit revenue and costs information: Computer Place Poster Paper Napkins Mats Board Selling price $14.00 $ 7.00 $12.00 $ 8.50 Materials $ 6.00 $ 4.50 $ 3.60 $ 2.50 Variable factory overhead 1.50 .60 2.40 2.00 Unit variable cost $ 7.50 $ 5.10 $ 6.00 $ 4.50 Contribution margin per unit $ 6.50 $ 1.90 $ 6.00 $ 4.00 (2) Revised contribution margins: Computer Place Poster Paper Napkins Mats Board Total Number of units 35 120 45 80 280 Sales $490.00 $840 $540 $680 $2,550.00 Cost of goods sold: Variable costs 297.50 612 288 360 1,557.50 Contribution margin $192.50 $228 $252 $320 $ 992.50 Unit revenue and costs information: Computer Place Poster Paper Napkins Mats Board Selling price $14.00 $ 7.00 $12.00 $ 8.50 Materials $ 7.00 $ 4.50 $ 4.00 $ 2.50 Variable factory overhead 1.50 .60 2.40 2.00 Unit variable cost $ 8.50 $ 5.10 $ 6.40 $ 4.50 Contribution margin per unit $ 5.50 $ 1.90 $ 5.60 $ 4.00 (3) (a) Breakeven point: $1,013,000 contribution margin 275,000 units = $3.684 contribution margin per unit $1,013,000 contribution margin $2,480,000 sales = 40.8% contribution margin ratio ($420,000 + $118,000 fixed costs) $3.684