Post by: fbq8i on Jun 7, 2019
Question 1
Darby is running a flower stand, and is selling a single bouquet for $31.50. Her contribution margin is $24.57 per bouquet and the breakeven sales in dollars for Darby's flower stand are $700 per day. How much can she pay per day in fixed costs to run the stand?Question 2
Tarfex Tech intended to sell a new product in order to keep up with customer demands. The product was to be sold to consumers at $620, creating a contribution margin of $150 per unit. They spent $9800 on advertising and were able to sell 1,200 units on the first day. Determine the resulting profit.Post by: amy.lauersdorf90 on Jun 7, 2019
Answer 1
CM = 24.57Contribution rate =
Contribution rate =
Contribution rate = 0.78 = 78%
Breakeven sales =
700 =
700 × 0.78 = FC
546 = FC
Answer 2
X = 1200; CM = 150; FC = 9800.00; SP = 620.00Contribution margin per unit = Selling price per unit - Variable cost per unit
150 = 620 - VC
VC = 620 - 150
VC = 470
(Selling price × Volume) - Fixed cost - (Variable cost per unit × Volume) = Profit
(620 × 1200) - 9800 - (470 × 1200) = PFT
744 000 - 9800 — 564 000 = PFT
170 200 = PFT
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