Peace Company
The Peace Company has the following functional income statement for the prior month.
Sales | ($50 * 100,000 units) |
| $5,000,000 |
Cost of goods sold |
|
| |
| Direct materials | $1,200,000 |
|
| Direct labor | $950,000 |
|
| Variable factory overhead | $600,000 |
|
| Fixed factory overhead | $850,000 | $3,600,000 |
Gross profit |
|
| $1,400,000 |
Selling and administrative expense |
|
|
|
| Variable |
|
|
| Fixed |
|
|
Operating income |
|
|
|
There were no beginning and ending inventories. |
|
| |
Required:
1. Calculate the contribution margin per unit.
2. Calculate the contribution margin ratio.
3. What is the break-even point in units?
4. What is the amount of sales in dollars needed to obtain a before-tax profit of $40,000?
11 years ago
Purchase the answer to view it
peace_company.docx
