Using Cost-Volume-Profit Formulas Gary Corporation Manufactures a Single Product.The Selling Price Is $104

question 50

Essay

Using cost-volume-profit formulas
Gary Corporation manufactures a single product.The selling price is $104 per unit,and variable costs amount to $78 per unit.The fixed costs are $36,000 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? ________%
(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 $32,000? ________units
(e)What is the monthly margin of safety (in dollars)if 3,000 units are sold each month? $________
(f)What will be the monthly operating income if 3,000 units are sold each month? $________

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Definitions:

Standard Cost System

A cost accounting system that uses standard costs for materials, labor, and overhead to control and reduce costs.

Work in Process

Partially finished goods that are still in the production process at the end of an accounting period.

Direct Labor Costs

Expenses that can be directly traced to the production of specific goods or services, including wages and benefits of workers involved in production.

Raw Materials

Basic substances in their natural, modified, or semi-processed states used as inputs for production.