4.

McCallen Company
a. Variable Manufacturing Cost 2.75
Variable Selling Cost 0.25
3
b. Contribution Margin Per Unit 8
3
5
c. Variable Cost Ratio 37.5%
d. Contribution Margin Ratio 62.5%

6. Music Now
a. Variable Cost Ratio
VC Per Unit 12
60
20%
b. Contribution Margin Ratio
60
12
48
60
80%
c. Break-even Point in Sales
Total Fixed Cost 24000
Contribution Margin Ratio 80%
30000
d. Selling Unit
Total Fixed Cost 24000
Target Profit 90000
114000
Selling Price 60
VC Per Unit 12
48
2375 MP3 Players

7
a. Contribution Margin Ratio
Sales 500,000.00
VC 100,000.00
400,000.00
500,000.00
80%
b. Level of sales
FC 200,000.00
Profit 40,000.00
Contribution Margin Ratio 80% 300,000.00
240,000.00
c. Contribution Margin Ratio
Sales 500000
1.1
550000
 VC 100000
450000
550000
81.82%
d. Level of Sales
FC 200000 293333.3
40000
81.82%
240000

8. Aaron Company
Selling price per unit 400
160
240

240
400
60%

240
120
1800
216000
900

216000
20000
60%
236000
393333.333333333