# Werth Company produces tie

Feb 3rd, 2012
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1. Werth Company produces tie racks. The estimated fixed costs for the year are \$288,000, and the estimated variable costs per unit are \$14. Werth expects to produce and sell 60,000 units at a price of \$20 per unit. A. Calculate the contribution margin ratio B. Calculate the contribution margin of each tie rack. C. Determine the break-even point in units. D. Determine Werth's margin of safety ratio. 2 - Donough Company had the following income statement: Sales revenue (800 units) \$80,000 Cost of goods sold: Fixed costs \$20,000 Variable costs 18,500 38,500 Gross profit \$41,500 Operating expenses: Fixed costs 12,000 Variable costs 13,500 25,500 Operating income \$16,000 A. How much is Donough's contribution margin? B. How many units must Donough sell in order to break even? 3 - Evans Company makes and sells cologne. This product has a unit sales price of \$40 and a unit variable cost of \$24. Fixed expenses are \$32,000 per month. 1. Calculate the c

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