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1. a.) Contribution per CD unit: Unit Selling  Variable Costs \$9.00  1.25 - .35  1.00 = \$6.40 \$6.40 b.) Break-even volume in CD units and dollars: (\$275‚000 + 250‚000) / 6.40 = 82‚032 units 82‚032 * \$9.00 = \$738‚288 to break even c.) Net profit if 1 million CD’s sold: 1‚000‚000 * 6.40 = 6‚400‚000 6‚400‚000  525‚000 = \$5‚875‚000 d.) Necessary

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statement is set using a contribution format. The contribution format centers on the idea that each unit sold provides a certain amount of contribution margin that goes to covering fixed costs. In 2004 expenses like distribution and transport (29‚988) and the sales commissions (73‚573) have been reclassified (contribution format) as variable selling costs on page 33 ([104]). 2. Why do you think cost of sales is included in the computation of contribution margin on page 33? Benetton’s

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has decreased. | 5. | Sales are \$500‚000 and variable costs are \$350‚000. What is the contribution margin ratio? | A) | 43%. | B) | 30%. | C) | 70%. | D) | Cannot be determined because amounts are not expressed per unit. | 6. | Barcelona Bagpipes produces two models: Model 24 has sales of 500 units with a contribution margin of \$40 each; Model 26 has sales of 350 units with a contribution margin

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CASH FLOW DIRECT/INDIRECT 1. Given the following information and using the indirect method prepare the Cash Flows from Operating Activities section of the statement of cash flows. End of Year Beginning of Year Change Cash 23‚500 37‚400 (13‚900) Accounts receivable (net)

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What is contribution margin? In cost-volume-profit analysis of managerial accounting contribution margin is a very concept. The evaluation of contribution margin for any product is quite easy yet its usage is wide and when applied with various other metrics of CVP analysis such as PV Ratio‚ Break Even Point‚ variable cost‚ fixed cost‚ etc it helps to take major production decisions relating to volume of production and sales‚ and profitability of such levels of sales or production. Step 1:

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profitability. E. All of these. 2. The break-even point is that level of activity where:  A. total revenue equals total cost. B. variable cost equals fixed cost. C. total contribution margin equals the sum of variable cost plus fixed cost. D. sales revenue equals total variable cost. E. profit is greater than zero. 3. The unit contribution margin is calculated as the difference between:  A. selling price and fixed cost per unit. B. selling price and variable cost per unit. C. selling price and product cost

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for \$121.90 per unit. According to the activity-based costing system‚ the product margin for product P23F is:  A. \$9‚223.20 B. \$7‚853.60 C. \$5‚401.60 D. \$22‚950.00 4. Kraska Corporation has provided the following data from its activity-based costing system:    Data concerning one of the company ’s products‚ Product O11W‚ appear below:    According to the activity-based costing system‚ the product margin for product O11W is:  A. \$4‚651.80 B. \$1‚688.10 C. \$17‚934.00 D. \$3‚956.10

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Excel Assignment #2 Preparing a Contribution Margin Income Statement and Operating Leverage Summer 2013 1. Assume that a company is budgeting to sell 2‚500 units of a product at a selling price per unit of \$32. The variable cost per unit is \$26 and total fixed costs are \$5‚000. REQUIRED Prepare a contribution margin income statement and calculate operating leverage. 2. Suppose the company is unsure exactly how many units they will sell. As such‚ their marketing department has provided

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Contribution Margin and Break Even Analysis. Many factors come into play in determining business success. One of them is the financial factor. For a company to set financial goals it is crucial that its management know in detail the products or services they sale or provide. This is the analysis of two different scenarios at Aunt Connie ’s Cookies Simulation (University of Phoenix‚ 2011) and the financial performance of Jamestown Electric Supply Company (Heiter‚ et. al. 2008). During both analysis

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Contribution Margin and Break Even Point by ACC 202 Trident University July 22‚ 2011 Contribution Margin and Break Even Point I’m going to discuss Contribution margin and what it is and how it relates to companies and profits. Contribution margin is the amount remaining from sales revenue after variable expenses have been deducted. It is the amount available to cover fixed expenses such as lease agreements and then to provide profits for the period. Contribution margin is first

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