Answer:
Step-by-step explanation:
Case A:
Unit Variable Costs = $25
Unit Selling Price = $70
Number of Units Sold = 15,000
Total Contribution Margin = (Number of Units Sold) * (Unit Selling Price - Unit Variable Costs)
Total Contribution Margin = 15,000 * ($70 - $25) = $525,000
Fixed Costs = $250,000
Operating Income = Total Contribution Margin - Fixed Costs
Operating Income = $525,000 - $250,000 = $275,000
Case B:
Unit Variable Costs = $25
Unit Selling Price = $70
Number of Units Sold = 30,000
Total Contribution Margin = (Number of Units Sold) * (Unit Selling Price - Unit Variable Costs)
Total Contribution Margin = 30,000 * ($70 - $25) = $1,350,000
Fixed Costs = $250,000
Operating Income = Total Contribution Margin - Fixed Costs
Operating Income = $1,350,000 - $250,000 = $1,100,000
Case C:
Unit Variable Costs = $25
Unit Selling Price = $70
Number of Units Sold = 24,000
Total Contribution Margin = (Number of Units Sold) * (Unit Selling Price - Unit Variable Costs)
Total Contribution Margin = 24,000 * ($70 - $25) = $1,080,000
Fixed Costs = $250,000
Operating Income = Total Contribution Margin - Fixed Costs
Operating Income = $1,080,000 - $250,000 = $830,000
Case D:
Unit Variable Costs = $25
Unit Selling Price = $70
Total Contribution Margin = $900,000
Total Contribution Margin = (Number of Units Sold) * (Unit Selling Price - Unit Variable Costs)
$900,000 = (Number of Units Sold) * ($70 - $25)
Solving for the Number of Units Sold:
(Number of Units Sold) = $900,000 / ($70 - $25)
(Number of Units Sold) = $900,000 / $45
(Number of Units Sold) = 20,000
Case E:
Unit Variable Costs = $25
Number of Units Sold = 30,000
Total Contribution Margin = $4,500,000
Total Contribution Margin = (Number of Units Sold) * (Unit Selling Price - Unit Variable Costs)
$4,500,000 = 30,000 * (Unit Selling Price - $25)
Solving for Unit Selling Price:
Unit Selling Price - $25 = $4,500,000 / 30,000
Unit Selling Price - $25 = $150
Unit Selling Price = $175
Case F:
Unit Variable Costs = $25
Number of Units Sold = 24,000
Total Contribution Margin = $1,728,000
Total Contribution Margin = (Number of Units Sold) * (Unit Selling Price - Unit Variable Costs)
$1,728,000 = 24,000 * (Unit Selling Price - $25)
Solving for Unit Selling Price:
Unit Selling Price - $25 = $1,728,000 / 24,000
Unit Selling Price - $25 = $72
Unit Selling Price = $97
Case G:
Fixed Costs = $250,000
Operating Income = $1,500,000
Operating Income = Total Contribution Margin - Fixed Costs
$1,500,000 = Total Contribution Margin - $250,000
Solving for Total Contribution Margin:
Total Contribution Margin = $1,500,000 + $250,000
Total Contribution Margin = $1,750,000
Case H:
Operating Income = $200,000
Fixed Costs = $250,000
Operating Income = Total Contribution Margin - Fixed Costs
$200,000 = Total Contribution Margin - $250,000
Solving for Total Contribution Margin:
Total Contribution Margin = $200,000 + $250,000
Total Contribution Margin = $450,000