Using Cost-Volume-Profit Formulas Fantasy Corporation Manufactures a Single Product.The Selling Price Is $125

question 90

Essay

Using cost-volume-profit formulas
Fantasy Corporation manufactures a single product.The selling price is $125 per unit,and variable costs amount to $81 per unit.The fixed costs are $28,500 per month (round any units to the next highest full unit).
(a)What is the contribution margin per unit? $________ per unit
(b)What is the contribution margin ratio? ________% (Rounded to 1 decimal place)
(c)What is the monthly sales volume (in dollars)at the break-even point? $________
(d)How many units must be sold each month to earn a monthly operating income of $50,000? ________units
(e)What is the monthly margin of safety (in dollars)if 1,500 units are sold each month? $________
(f)What will be the monthly operating income if 1,500 units are sold each month? $________

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Definitions:

Equilibrium Price

The price at which the quantity of goods supplied equals the quantity of goods demanded in a market, resulting in no surplus or shortage.

Equilibrium Quantity

The level of goods or services on offer and needed at the market's equilibrium price.

Steamed Milk

Milk that has been heated and aerated with steam, typically used in coffee drinks like lattes and cappuccinos.

Equilibrium Quantity

The quantity of a good or service at which supply equals demand, so there is no excess of supply over demand or vice versa.