Reference no: EM131801951

Delta Manufacturing has sales of $2,000,000 with direct materials cost of $400,000, direct labor of $280,000, variable overhead of $120,000, and fixed costs of $300,000. What is Delta's contribution margin percentage?

Sports Specialty Inc. produces a bicycle that it normally sells wholesale for $250 per bike. The variable costs of production are $160 and the fixed cost for this product line is $154,000 per month. The company has been selling this product at a rate of 2,000 units per month. The company has received an order for 1,000 bikes at a price of $182 per bike. The order is to ship to a market where the company has no business, so it is believed it will not adversely affect existing business. The company has the capacity to produce the special order. How much will operating profit increase if Sports Specialty accepts this order?

A company president wants the chief financial officer to tell him how many sales are required to make a $1,000,000 operating profit. Variable production costs are 70% of sales, and fixed costs are $2,750,000. What are the required sales, rounded to the closest dollar?