Eb6.
lo 3.2kerr manufacturing sells a single product with a selling price of $600 with variable costs per unit of $360. the company’s monthly fixed expenses are $72,000.

what is the company’s break-even point in units?
what is the company’s break-even point in dollars?
prepare a contribution margin income statement for the month of january when they will sell 500 units.
how many units will kerr need to sell in order to realize a target profit of $120,000?
what dollar sales will kerr need to generate in order to realize a target profit of $120,000?
construct a contribution margin income statement for the month of june that reflects $600,000 in sales revenue for kerr manufacturing.

Instructions are listed below.

Explanation:

Giving the following information:

selling price= $600

variable costs per unit of $360.

The monthly fixed expenses are $72,000.

a) Break-even point= fixed costs/ contribution margin

Break-even point= 72,000/(600 - 360)= 300 units

b) Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= 72,000/(240/600)= $180,000

c) Contribution margin income statement:

Sales= 500*600= 300,000

Variable cost= 500*360= (180,000)

Contribution margin= 120,000

Fixed costs= (72,000)

Net operating income= 48,000

d) Profit= 120,000

Break-even point= (fixed costs + target profit)/ contribution margin

Break-even point= 192,000/240= 800 units

e) Break-even point (dollars)= (fixed costs + target profit)/ contribution margin ratio

Break-even point (dollars)=  192,000/(240/600)= $480,000

f) Contribution margin income statement:

Sales= 600,000

Variable costs= (10,000*360)= (360,000)

Contribution margin= 240,000

Fixed costs= (72,000)

Net operating income= 168,000

1. Break-even in units is 300 units

2. Break-even in dollars is $180,000

3. Contribution Income Statement for 500 units

Sales revenue (500 x 600)    $300,000

Variable cost   (500 x 360)     (180,000)

Contribution margin                $120,000

Fixed cost                                   (72,000)

Profit                                          $48,000

4. Units to sell is 800

5. Dollars sales is $480,000

6. Contribution Income Statement for $600,000 sales revenue

Sales revenue (1,000 x 500)    $600,000

Variable cost   (1,000 x 360)     (360,000)

Contribution margin                    $240,000

Fixed cost                                       (72,000)

Profit                                              $168,000

Explanation:

1. To compute the Break-even point in units,

Formula is BEP = total fixed cost / unit contribution margin

 Step 1. Compute the unit contribution margin

Unit selling price              $600

Less : variable cost             360

Unit contribution margin   $240

  Step 2. compute the unit break-even in units using the formula.

BEP = total fixed cost / unit contribution margin

BEP = $72,000 / 240

BEP = 300 units

2. To compute the Break-even point in dollars,

Formula is BES = total fixed cost / contribution margin ratio

 Step 1. Compute the contribution margin ratio

Unit selling price              $600

Less : variable cost             360

Unit contribution margin   $240

So, $240 divided by $600 equals 40% (CMR)

  Step 2. compute the unit break-even in dollars using the formula.

BEP = total fixed cost / contribution margin ratio

BEP = $72,000 / 40%

BEP = $180,000

3. To prepare the contribution margin income statement, we will multiply the units sold of 500 units by $600 to get the sales revenue. Then multiply 500 units by $360 to get the variable cost. Further illustration below;

Sales revenue (500 x 600)    $300,000

Variable cost   (500 x 360)      (180,000)

Contribution margin                $120,000

Fixed cost                                 (72,000)

Profit                                         $48,000

4. To compute the units to sell to realize the target profit we will use the formula:

(Total fixed cost +  Target profit )/ unit contribution margin

 Step 1. Compute the unit contribution margin

Unit selling price              $600

Less : variable cost             360

Unit contribution margin   $240

  Step 2. compute the units to sell using the formula.

(Total fixed cost + target profit) / unit contribution margin

($72,000  + $120,000) / 240

Answer is 800 units

5. To compute the sales in dollars to realize the target profit of $120,000,

Formula is (Total fixed cost + target profit) / contribution margin ratio

 Step 1. Compute the contribution margin ratio

Unit selling price              $600

Less : variable cost             360

Unit contribution margin   $240

So, $240 divided by $600 equals 40% (CMR)

  Step 2. compute the target sales in dollars using the formula.

(Total fixed cost + target profit) / contribution margin ratio

($72,000 + $120,000) / 40%

$192,000 / 40%

Answer is $480,000

6. Contribution Income Statement for $600,000 sales revenue. FIRST we must determine how many unit are sold to have that sales revenue. $600,000 sales revenue divided by unit selling price of $600 equals 1,000 units. To further illustrate, see presentation below.

$600,000 / $600 = 1,000 units

Sales revenue (1,000 x 600)    $600,000

Variable cost   (1,000 x 360)     (360,000)

Contribution margin                 $240,000

Fixed cost                                     (72,000)

Profit                                           $168,000

b. a single paragraph.

a paragraph is a series of sentences that are organized and make sense, and are all related to a single topic . almost every piece of writing you do that is longer than a few sentences should be organized into paragraphs. this is because paragraphs show a reader where the subdivisions of an essay begin and end, and thus the reader see the organization of the essay into subjects in order to be able to understand its main points.

answer; how many employees will be needed for jobs in the coming period;