question archive 1) Young Company has provided the following information: Price per unit $40 Variable cost per unit 12 Fixed costs per month $10,000 What is the contribution margin ratio? A) 12% B) 60% C) 40% D) 70% 2) First Buy Company provided the following manufacturing costs for the month of June
1) Young Company has provided the following information: Price per unit $40 Variable cost per unit 12 Fixed costs per month $10,000 What is the contribution margin ratio? A) 12% B) 60% C) 40% D) 70% 2) First Buy Company provided the following manufacturing costs for the month of June
Subject:AccountingPrice:4.87 Bought7
1) Young Company has provided the following information:
|
Price per unit |
$40 |
|
Variable cost per unit |
12 |
|
Fixed costs per month |
$10,000 |
What is the contribution margin ratio?
A) 12%
B) 60%
C) 40%
D) 70%
2) First Buy Company provided the following manufacturing costs for the month of June.
|
Direct labor cost |
$136,000 |
|
Direct materials cost |
80,000 |
|
Equipment depreciation (straight-line) |
24,000 |
|
Factory insurance |
19,000 |
|
Factory manager's salary |
12,800 |
|
Janitor's salary |
5,000 |
|
Packaging costs |
18,800 |
|
Property taxes |
16,000 |
From the above information, calculate First Buy's total variable costs.
A) $311,600
B) $62,300
C) $234,800
D) $38,400
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Answers
- Question 1:
Unit Contribution = Unit Sale price – Unit Variable Cost
= $ 40 - $ 12 = $ 28
Contribution margin Ratio (CM Ratio) = Unit Contribution / Unit Sales Price
= $ 28 / $ 40 = 0.7
Hence, CM Ratio = 70% [0.7 x 100) = Option D: 70%
- Question 2
Total Variable costs:
Direct labor cost = 136000
Direct Material cost = 80000
Packaging Costs = 18800
Total variable cost = 136000 + 80000 + 18800
= $ 234,800 =
Option C: $ 234,800
