If the per unit variable production costs increase by 15

Reference no: EM13581284

Decor manufactures decorative iron railings. In preparing for next years operations, managemnet has developed the following estimates:

Total Per Unit

Sales ( 100,000 units) 5,000,000 $50.00

Direct materials 1,160,000 $11.60

Direct labor (variable) 410,000 $4.10

Manufacturing Overhead:

Variable 510,000 $5.10

Fixed 560,000 $5.60

Selling and Administrative:

Variable $660,000 $6.60

Fixed $310,000 $3.10

1A. Compute the unit contribution margin. Answer = ?

1B. Compute the contribution margin ratio. Answer =?

1C. Compute the break-even in dollar sales. Answer=?

1D. Compute the Margin of safety percentage. Answer=?

1E. If the sales volume increases by 20% with no change in total fixed expenses, what will be the change in net operating income?

1F. If the per unit variable production costs increase by 15% and, if fixed selling and administrative expenses increase by 12%, what will be the new break-even point in dollar sales?

Reference no: EM13581284

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