What is baileys contribution margin per unit

Assignment Help Managerial Accounting

Reference no: EM133502536

Question: Bailey Company manufacturers and sells one product for $39 per unit. The company maintains no beginning or ending inventories and its relevant range of production is 20,000 units to 30,000 units. When Bailey Company produces and sells 24,000 units, its unit costs are as follows:

Amount per
Unit
Direct materials $ 10.00
Direct labor $ 6.00
Variable manufacturing overhead $ 2.00
Fixed manufacturing overhead $ 7.00
Fixed selling expense $ 3.75
Fixed administrative expense $ 2.25
Sales commissions $ 4.50
Variable administrative expense $ 1.50

Required: (note some answers are "Total" Costs while others are "Per Unit" costs) Answers

1a For financial accounting purposes, what is the TOTAL PRODUCT COSTS incurred to make 24,000 units?

1b What is the TOTAL PERIOD COSTS incurred to sell 24,000 units?

2a If 23,000 units are produced, what is the variable manufacturing cost per unit produced? Round answers to 2 decimal places

2b If 23,000 units are produced, what is the average fixed manufacturing cost per unit produced? Round answers to 2 decimal places

3a If 25,000 units are produced, what is the variable manufacturing cost per unit produced? Round answers to 2 decimal places

3b If 25,000 units are produced, what is the average fixed manufacturing cost per unit produced? Round answers to 2 decimal places

4a If 26,000 units are produced, what are the TOTAL AMOUNT of direct manufacturing costs incurred to support this level of production?

4b If 26,000 units are produced, what are the TOTAL AMOUNT of indirect manufacturing costs incurred to support this level of production?

5 What total incremental manufacturing cost will Bailey incur if it increases production from 24,000 to 24,001? Round answer to 2
decimal places

6a What is Bailey's contribution margin per unit? Round answer to 2 decimal places

6b What is its contribution margin ratio? Round answer to 2 decimal places

7a What is Bailey's break-even point in unit sales? Do not round your intermediate values

7b What is Bailey's break-even point in dollar sales? Do not round your intermediate values

8 How much will Bailey's net operating income increase if it can grow production and sales from 24,000 units to 25,500 units?

9 What is Bailey's margin of safety in dollars and cents at a sales volume of 24,000 units Do not round your intermediate values

10 What is Bailey's degree of operating leverage at a sales volume of 24,000 units? Round your answer to 1 decimal place

Reference no: EM133502536

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