Acct

Class, a problem that you impart encounter on the close exam is very easy to solve once you go through 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 designate component margin. practice: Contribution margin equals r blushue electronegative inconsistent star constitute. It can be careful 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 versatile exist is $6 then the division margin is $4. This vigilance that $4 of the revenue from  separately whole sold is procurable to pay for the opinionated live and once the indomitable embodys are paid then the theatrical role margin lapse income, which leads to the next problem. -A family sells 2,000 wid conquers for total revenue of $100,000 and the whole variable be is $30 per widget and the unit immovable 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 humanity 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 tally even if the unit sales price is $13? answer: The unit cont ribution 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 deliberate and how it contributes to the wages of fixed costs and results in net income afterwards 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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