Solution-Contribution margin ratio, degree of operating

Contribution margin ratio, degree of operating leverage

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Reference no: EM131776628

Waterways Continuing Problem

The section of Waterways that produces controllers for the company provided the following information.

Sales for month of February	4,000
Variable manufacturing cost per unit	$9.75
Sales price per unit	$42.50
Fixed manufacturing overhead cost (per month for controllers)	$81,000
Variable selling and administrative expenses per unit	$3.00
Fixed selling and administrative expenses (per month for controllers)	$13,122

Using this information for the controllers, determine the contribution margin ratio, the degree of operating leverage, the break-even point in dollars, and the margin of safety ratio for Waterways Corporation on this product.

Contribution Margin Ratio (Round to 0 decimal places, e.g. 25%.)

Degree of Operating Leverage (Round to 2 decimal places, e.g. 5.25.)

Break-even Point in Dollars

Margin of Safety Ratio (Round to 1 decimal place, e.g. 5.2%.)

Reference no: EM131776628

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Contribution margin ratio, degree of operating leverage

Reference no: EM131776628

Reference no: EM131776628

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