Calculate the variable cost ratio

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Problem 1 - Chillmax Company plans to sell 3,500 pairs of casual shoes at $60 each in the coming year. Product costs include: Variable selling expense is a commission of $3 per pair; fixed selling and administrative expense totals $48,000. Prepare a contribution margin income statement for Chillmax Company for the coming year.

Problem 2 - Chillmax Company plans to sell 3,500 pairs of shoes at $60 each in the coming year. Unit variable cost is $21 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $78,000 (includes fixed factory overhead and fixed selling and administrative expense). Calculate the break-even pairs of shoes. Check your answer by preparing a contribution margin income statement based on the break-even units.

Problem 3 - Chillmax Company plans to sell 3,500 pairs of shoes at $60 each in the coming year. Unit variable cost is $21 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Fixed factory overhead is $30,000 and fixed selling and administrative expense is $48,000. Calculate the variable cost ratio. Calculate the contribution margin ratio.

Reference no: EM132871544

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