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  • Negotiable Act 1881

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    Aabroo Fatima
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    Detroit Disk, Inc. analyzed the effects of changes to sale price, variable cost, and contribution margin on key financial metrics. Requirement 1 shows the break-even point decreasing when sale price increased and contribution margin per unit rose. Requirement 2 displays total contribution margin and net income growing as contribution margin per unit increased. Requirement 3 calculates sales volume would need to be lower to reach the target net income when contribution margin improved.

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    managerial accounting-chapter;7-problem 7-36-part 5

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    Detroit Disk, Inc. analyzed the effects of changes to sale price, variable cost, and contribution margin on key financial metrics. Requirement 1 shows the break-even point decreasing when sale price increased and contribution margin per unit rose. Requirement 2 displays total contribution margin and net income growing as contribution margin per unit increased. Requirement 3 calculates sales volume would need to be lower to reach the target net income when contribution margin improved.

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    Download as XLSX, PDF, TXT or read online from Scribd
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    5 views2 pages

    Negotiable Act 1881

    Uploaded by

    Aabroo Fatima
    Detroit Disk, Inc. analyzed the effects of changes to sale price, variable cost, and contribution margin on key financial metrics. Requirement 1 shows the break-even point decreasing when sale price increased and contribution margin per unit rose. Requirement 2 displays total contribution margin and net income growing as contribution margin per unit increased. Requirement 3 calculates sales volume would need to be lower to reach the target net income when contribution margin improved.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    Detroit Disk, Inc.

    REQUIREMENT-1 given data change data


    materials amounts amounts
    fixed cost 1800000 1700000
    sale price per unit 24 25
    variable cost per unit 18 18

    contribution margin per unit 6 7


    break even point in units 300000 242857.1429

    REQUIREMENT-2 given data change data


    materials amounts amounts
    sales volume 440000 440000
    contribution margin 6 7
    total contribution margin 2640000 3080000
    fixed expences 1800000 1700000
    net income 840000 1380000

    REQUIREMENT-3 given data change data


    materials amounts amounts
    fixed cost 1800000 1700000
    target net income 600000 600000
    sale price 24 25
    variable cost 22.5 22.5
    contribution margin 1.5 2.5
    contribution margin ratio 0.0625 0.1
    volume of sales in dollars 38400000 183000000

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