calculate a weighted average contribution margin per unit, Financial Accounting

Assignment Help:

Part A

 The contribution margin income statement of Nice Cup Company for 31 December 2011 follows:

Nice Cup Company

 

Contribution Margin Income Statement

 

Year Ended December 31, 2011

 

 




RM

RM


Sales revenue

 

 127,000

 

Variable costs:

 

 

 

Cost of goods sold

 32,400

 

 

Marketing costs

 17,300

 

 

General and administrative costs

10,625

60,325

 

Contribution margin

 

66,675

 

Fixed costs:

 

 

 

Marketing costs

56,700

 

 

General and administrative costs

6,300

63,000

 

Operating income

 

 3,675

 

Nice Cup Company sells two dozen of chocolate cupcake for every dozen of blueberry cupcake. A dozen chocolate cup cake plain donuts sells for RM6, with total variable cost of RM2 per dozen. A dozen blueberry cupcake sells for RM8, with total variable cost of RM5.50 per dozen.

REQUIRED

a) Determine Nice Cup Company's monthly breakeven point in dozens of chocolate cupcake and blueberry flavor cupcake. Prove your answer by preparing a summary contribution margin income statement at the breakeven level of sales.

b) Compute Nice Cup Company's margin of safety in value for December 2011.

c) If Nice Company can increase monthly sales volume by 10%, what will operating income be? (The sales mix remains unchanged.)

Part B

a) Explain the term sales mix in your own words. How does sales mix affect the contribution margin?

b) Explain how to calculate a weighted average contribution margin per unit.


Related Discussions:- calculate a weighted average contribution margin per unit

Investment of accumulated income-trusts laws and accounts, Investment of ac...

Investment of accumulated income The income accumulations must be invested from time to time and the investments earmarked as being on Accumulations Account. The income aris

Economic order quantity formula, For getting the EOQ formula we shall use t...

For getting the EOQ formula we shall use the subsequent symbols: U = annual usage/demand Q = quantity ordered F = cost per order C = per cent carrying cost P  = pric

Corporation''s gain or loss on the sale, The Gladys Corporation buys office...

The Gladys Corporation buys office equipment costing $426,000 on May 12, 2013. In 2015, new and improved models of the equipment make it obsolete, and Gladys sells the old equipmen

Generates the state dependent cash flows, Consider an economy with three st...

Consider an economy with three states which occur with probability (0.2, 0.4, 0.4). Suppose a firm has a project which generates the state dependent cash flows (100, 200, 200) at t

Prepare a post-closing trial balance, Ocean Atlantic Co. is a merchandising...

Ocean Atlantic Co. is a merchandising business. the account balances for Ocean Atlantic co. as of July 1, 2012 (unless otherwise indicated), are as follows: 110 Cash 63,600 1

Idiosyncratic risk of the stock, (a)   The market considers Intel Corp (INT...

(a)   The market considers Intel Corp (INTC) of all these stocks to be the riskiest since it has the highest beta of 1.497408. No, this measure of risk does not include the idiosyn

Explain about short-term bank loans and overdrafts, Q. Explain about Short-...

Q. Explain about Short-term bank loans and Overdrafts? Short-term bank loans and Overdrafts. The symptom are that Vertid is unlikely to obtain further finance from its bank alt

Proposed dividends by subsidiary company, Proposed dividends by subsidiary ...

Proposed dividends by subsidiary company If the subsidiary company has proposed some dividends appearing under current liabilities then the dividends are payable to the holding c

Service revenue earned on account, what type of transaction is a service re...

what type of transaction is a service revenue earned on account? a) asset source, b) asset use, c) asset exchange or d) claims exchange?

Practise.., What would be the effect on the balance sheet if adjustments (a...

What would be the effect on the balance sheet if adjustments (a) and (f) were omitted at the end of the year?k question #Minimum 100 words accepted#

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd