A company's flexible budget for 21,000 units of production showed total contribution margin of $96,600 and fixed costs, $37,300. The income expected if the company produces and sells 24,000 units is:
Question
A company's flexible budget for 21,000 units of production showed total contribution margin of 37,300. The income expected if the company produces and sells 24,000 units is:
Solution
To solve this problem, we first need to understand the concept of contribution margin. Contribution margin is the selling price per unit minus the variable cost per unit.
Here's how to calculate the income expected if the company produces and sells 24,000 units:
-
First, calculate the contribution margin per unit. We do this by dividing the total contribution margin by the number of units produced. In this case, 4.6 per unit.
-
Next, calculate the total contribution margin for 24,000 units. We do this by multiplying the contribution margin per unit by the number of units. In this case, 110,400.
-
Finally, subtract the fixed costs from the total contribution margin to get the expected income. In this case, 37,300 = $73,100.
So, the income expected if the company produces and sells 24,000 units is $73,100.
Similar Questions
Required informationSkip to question[The following information applies to the questions displayed below.]The fixed budget for 21,900 units of production shows sales of $635,100; variable costs of $65,700; and fixed costs of $143,000.If the company actually produces and sells 26,300 units, calculate the flexible budget income.
Based on a predicted level of production and sales of 22,000 units, a company anticipates total variable costs of $99,000, fixed costs of $30,000, and operating income of $36,000. Based on this information, the budgeted amount of fixed costs for 20,000 units would be:Group of answer choices$99,000.$90,000.$66,000.$30,000.$150,000.
Fill in the Blank QuestionFill in the blank question.A company produces a product with a contribution margin per unit of $36. If the company incurs $62,000 in total fixed costs and expects to sell 2,500 units their income would be $.
A company with monthly fixed costs of $170,000 expects to earn monthly operating income of $25,000 by selling 6,500 units per month. What is the company's expected unit contribution margin?Multiple Choice$30 per unit$26 per unit$22 per unitThe information given is insufficient to determine unit contribution margin.
Our company sells a product for $150 per unit. Variable costs are $90 per unit and fixed costs are $18,000. The company expects to sell 800 units this year. What is the contribution margin in total dollars?Group of answer choices$60$18,000$30,000$48,000
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.