Price, Variable Cost per Unit, Contribution Margin, Contribution Margin Ratio, Fixed Expense For each of the following independe

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Price, Variable Cost per Unit, Contribution Margin, Contribution Margin Ratio, Fixed Expense For each of the following independe

nt situations, calculate the amount(s) required. Required: 1. At the break-even point, Jefferson Company sells 115,000 units and has fixed cost of $349,600. The variable cost per unit is $4.56. What price does Jefferson charge per unit? Note: Round your answer to the nearest cent. $ 2. Sooner Industries charges a price of $120 and has fixed cost of $458,000. Next year, Sooner expects to sell 15,600 units and make operating income of $166,000. What is the variable cost per unit? What is the contribution margin ratio? Note: Enter the contribution margin ratio as a percentage, rounded to two decimal places. Variable cost per unit $ per unit Contribution margin ratio % 3. Last year, Jasper Company earned operating income of $22,500 with a contribution margin ratio of 0.25. Actual revenue was $235,000. Calculate the total fixed cost to the nearest whole dollar. $ 4. Laramie Company has a variable cost ratio of 0.56. The fixed cost is $103,840 and 23,600 units are sold at break-even. What is the price? What is the variable cost per unit? The contribution margin per unit? Note: Round answers to the nearest cent. Price $ Variable cost per unit $ Contribution margin per unit $

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1 answer:

Scilla [3.8K] · Answer 1 · 2026-04-03T18:42:08+03:00

Answer and Explanation:

The calculation is detailed below:

1. Given that

The break-even point is 115000 units

Fixed cost = $349,600

As we know that

The Contribution Margin (CM) per unit is

= Fixed cost ÷ Break even units

= $349,600 ÷ 115,000

= 3.04 per unit

= $4.56 + $3.04

= $7.60 per unit

2. Given that

Net Income at 15600 units is $166,000

Fixed cost = $458,000

So,

Contribution is

= $458,000 + $166,000

= $624,000

Now

CM per unit is

= $624,000 ÷ 15,600

= 40 per unit

The selling price per unit is: 120

Thus,

Variable cost per unit is

= $120 - 40

= 80 per unit

And,

CM ratio is

= CM per unit ÷ Selling price per unit

= $40 ÷ 120 × 100

= 33.33%

3. Given that

Net Operating income = $22,500

CM ratio = 25%

Actual revenue = $235,000

Therefore,

Contribution earned is

= $235,000 × 25%

= $58,750

Now

Fixed cost = Contribution - Net income

= $58,750 - $22,500

=$36,250

4. Given that

Variable cost ratio = 56%

Fixed cost = $103,840

Break even units= 23600 units

Thus,

CM per unit is

= $103,840 ÷ 23,600

=$4.40

CM ratio = 100 - 56% = 44%

And the selling price per unit is

=$4.40 ÷ 44%

=$10 per unit

Now

Variable cost per unit is

=$10 × 56%

=$5.60 per unit

And,

Contribution per unit is

= $10 × 44%

=$4.40 per unit