Q # 6.

Req.1 Current Contribution Margin Ratio Sales - Variable Cost / Sales

Current Contribution Margin Ratio 10000000 -8000000 / 10000000
Current Contribution Margin Ratio 0.2

Req. 2 Break even Point in sales= Fixed Cost / Contribution Margin ratio
Break even Point in sales= 1000000/ 0.2
Break even Point in sales= 5000000

Req.3 (a) Break even Point in sales= Fixed Cost / Contribution Margin ratio
Break even Point in sales= 1100000/ 0.2
Break even Point in sales= 5500000

Req.3(b) Calculation of Profit $

Sales 10000000
Less Variable Cost 8000000
Contribution Margin 2000000
Less Fixed Cost 1100000
Profit 900000

Req. 4 (a) Current Contribution Margin Ratio Sales - Variable Cost / Sales
Current Contribution Margin Ratio 10000000 -7500000 / 10000000
Current Contribution Margin Ratio 0.25

Req. 4 (b) Break even Point in sales= Fixed Cost / Contribution Margin ratio
Break even Point in sales= 1250000/ 0.25
Break even Point in sales= 5000000

Req. 4 (c) Calculation of Profit $

Sales 10000000
Less Variable Cost 7500000
Contribution Margin 2500000
Less Fixed Cost 1250000
Profit 1250000
 Q # 7.

Req.1 Break even Point in sales=

Break even Point in sales=
Break even Point in sales=

Req. 2 Break even Point in Units=

Break even Point in Units=
Break even Point in Units=

Req.3 Break even Point in sales=

Break even Point in sales=
Break even Point in sales=

Amount of Sales to earn Target

Req.4 Profit
Amount of Sales to earn Target
Profit
Amount of Sales to earn Target
Profit

Increase in Sales
Increase in Sales
Increase in Sales

Req. 5 Break even Point in sales=

Break even Point in sales=
Break even Point in sales=

Budgeted Profit
Sales
Less Varibale Cost
Contibution Margin
Less Fixed Cost
Profit
Fixed Cost / Contribution Margin ratio CM Ratio=
46200 / 0.7 CM Ratio=
66000 CM Ratio=

Fixed Cost / Contribution Margin CM

46200 / 1.4 CM
33000 CM

Fixed Cost / Contribution Margin ratio CM Ratio=

46200 + 1867 / 0.71 CM Ratio=
67700 CM Ratio=

Fixed Cost + Target Profit / Contribution Margin ratio CM Ratio=

48367 + 9800 / 0.69 CM Ratio=

84300 CM Ratio=

New sales - Old Sales

84300 - 80000
4300

Fixed Cost / Contribution Margin ratio New Sale price

46200 / 0.7 New Sale price
66000
No. of Units
$ No. of Units
71400
21420 New Sales
49980 New Sales
46200
3780 V.C to Sales
V.C to Sales

New V.Cost
New V.Cost

CM Ratio=
CM Ratio=
CM Ratio=
Sales - Variable Cost / Sales
80000 -24000 / 80000
0.7

Sales - Variable Cost

2 - 0.6 2
1.4 0.6

Sales - Variable Cost / Sales

80000 -23200 / 80000
0.71

Sales - Variable Cost / Sales

80000 -24800 / 80000

0.69

2 + 2 * 5%
2.1

40000 - 40000 *15%

34000

34000 *2.1
71400

24000 / 80000 * 100

30

71400 * 30%
21420

Sales - Variable Cost / Sales

71400 -21420 / 71400
0.7
 Q # 13

Req.1 Break even Point in Units Fixed Cost / Contribution Margin

Break even Point in Units 2500 / 50
Break even Point in Units 50

Req.2 Operating Income $

Sales (125 *100)
Less Cost of goods Sold:
Direct labour (125 *15) 1875
Direct Material Used (125*14) 1750
Variable Foh (125 *10) 1250
Fixed Foh 500
Total Cost of Goods Sold
Gross Profit
Less Marketing Expenses:
Variable (125 *6) 750
Fixed 1000
Less Administrative Expenses:
Variable (125 *5) 625
Fixed 1000
Total Marketing & Admin Exp
Operating Income

Req.3 Break even Point in sales= Fixed Cost / Contribution Margin ratio
Break even Point in sales= (2500 + 1700)/ 0.5
Break even Point in sales= 8400
 CM = Sales - Variable Cost Sales
CM = 100 - 50 V.Cost
CM = 50

Sales 10000
$ Variable Cost 5000
12500 Fixed Cost 2500

No. of Units 100 + 100 *25%

No. of Units 125

5375
7125

3375
3750

CM Ratio= Sales - Variable Cost / Sales

CM Ratio= 10000 -5000 / 10000
CM Ratio= 0.5
100
50