ACC 206 Class Notes Ashford

Apr 18th, 2015
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Ashford University
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Week 4 AssignmentACC 206E 19-19 1.Contribution Margin# of units required to breakevenA$150500B$120625C$200375D$1504002.Decrease in sales price decreases contribution margin and increases the number of units required to break even. A decrease in variable costs increased the contribution margin and decreases the number of units required to break even. A decrease in fixed costs has no effect on contribution margin but it did decrease the number of units needed to breakeven. P 19-24AReq. 1Sales Revenue-Variable costs-Fixed costs=Operating incomeSaleVariablepriceUnits sold-costUnits sold-Fixed costs=Operating incomeper unitper unit(12 x units sold) - (4.80 x units sold) - 583200= 0(12 x units sold) - (4.80 x units sold)= 583200(12 -4.80) x units sold=5832007.20X units sold=583200(7.20 / 7.20) units =583200/7.20Units sold required to breakeven=81000Req. 2Contribution margin=$7.20/$12 = .60 or 60%Contribution margin ratio=583200/.6 = $972000 Required to break evenTarget sales in dollars=Fixed costs + Target operating incomeContribution margin ratioTarget sales in dollars= 583200 + 33000.6 = 616200 .6= $1027000Req 3.KincaidContribution Margin Income Statement

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