Quiltworks Company reported actual sales of $2,000,000, and fixed costs of $450,000. The contribution margin ratio is 30%.
Instructions
(a) Compute the break-even point in dollars
(b) Compute the margin of safety in dollars and the margin of safety ratio
Q2 XYZ Inc. produces flash drives. The selling price is $8 per drive. The variable cost of production is $2.40 per unit and the fixed cost per month is $3,600.
(a) Calculate the contribution margin associated with each flash drive.
(b) In August, the company sold 200 more flash drives than planned. What is the expected effect on profit of selling the additional drives?
(c) Calculate the contribution margin ratio associated with one flash drive.
(d) In October, the company had sales that were $2,400 higher than planned. What is the expected effect on profit related to the additional sales?
