The Peace Company has the following functional (traditional) income statement for the prior month.
($50 * 100,000 units)
Cost of goods sold
Variable factory overhead
Fixed factory overhead
Selling and administrative expense
There were no beginning and ending inventories.
Calculate the contribution margin per unit.
Calculate the contribution margin ratio.
What is the break-even point in units?
What is the amount of sales in dollars needed to obtain a before-tax profit of $40,000?
Manufacturing has estimated monthly sales of 18,000 units for $48 per
unit. Variable costs include manufacturing costs of $27 and distribution
costs of $9 per unit. Fixed costs are $60,000 per month.
Determine each of the following values.
Unit contribution margin
Monthly break-even unit sales volume
Before-tax monthly profit
Monthly margin of safety in units
e. Create a contribution margin-based income statement.
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