The following information was obtained from the accounting records of Maxamillion Manufacturing Company during a period when the company sold 200,000 units.
A. Compute the company's per-unit contribution margin and break-even point.
B. How many units must Maxamillion sell to produce a target net profit of $550,400?
C. Assume that Maxamillion was able to reduce the variable cost per unit by $5. What selling price could management charge if it desired to maintain the current break-even point?
D. Depreciation charges of $800,000 are included in the firm's fixed costs of $6,016,000. If these charges were to increase by 20%, what effect, if any, would this cost increase have on the company's contribution margin?

Question

Quizplus · Accepted Answer

The Answer of The following information was obtained from the accounting records of Maxamillion Manufacturing Company during a period when the company sold 200,000 units.
A. Compute the company's per-unit contribution margin and break-even point.
B. How many units must Maxamillion sell to produce a target net profit of $550,400?
C. Assume that Maxamillion was able to reduce the variable cost per unit by $5. What selling price could management charge if it desired to maintain the current break-even point?
D. Depreciation charges of $800,000 are included in the firm's fixed costs of $6,016,000. If these charges were to increase by 20%, what effect, if any, would this cost increase have on the company's contribution margin?

The Following Information Was Obtained from the Accounting Records of Maxamillion