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Compute the contribution margin for the current year

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Reference no: EM133128589

Question - Cullumber Corporation has collected the following information after its ?rst year of sales. Sales were $2,000,000 on 100,000 units, selling expenses $210,000 (40% variable and 60% ?xed), direct materials $498,000, direct labor $600,200, administrative expenses $280,000 (20% variable and 80% ?xed), and manufacturing overhead $374,000 [70% variable and 30% ?xed). Top management has asked you to do a CVP analysis so that it can make plans for the coming year. It has projected that unit sales will increase by 10% next year.

(A) Compute (1) the contribution margin for the current year and the projected year, and (2) the fixed costs for the current year.

(B) Compute the break-even point in units and sales dollars for current year.

(C) The company has a target net income of $206,000. What is the required sales in dollars for the company to meet its target?

Reference no: EM133128589

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