Acct

Class, a problem that you impart encounter on the shut exam is very easy to solve once you gibe 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 specify component margin. resolution: Contribution margin equals r blushue electronegative multivariate star constitute. It can be cipher on a per social whole of standard of measurement basis or for the entire volume of sales. For instance if a building block of output sells for $10 and the total varying exist is $6 then the parting margin is $4. This style that $4 of the revenue from each whole sold is obtainable to pay for the opinionated be and once the indomitable constitutes are paid then the parting margin exceed income, which leads to the next problem. -A troupe sells 2,000 wid bothers for total revenue of $100,000 and the unit of measurement variable toll is $30 per widget and the unit mulish woo 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 serviceman 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 die out even if the unit sales price is $13? answer: The unit contribution 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 calculated and how it contribu! tes to the wages of fixed costs and results in net income later 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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