GigaCo. manufactures 1-GB flash drives (jump drives). Price and cost data for a relevant range… 1 answer below »

GigaCo. manufactures 1-GB flash drives (jump drives). Price and cost data for a relevant range extending to 200,000 units per month are as follows: Sales price per unit (current monthly sales volume is 130,000 units) ………………………… $ 20.00 Variable costs per unit: Direct materials………………………………………………………………… 6.20 Direct labour……………………………………………………………………. 7.00 Variable manufacturing overhead………………………………………… 2.00 Variable selling and administrative expenses………………………….. 1.80 Monthly fixed expenses: Fixed manufacturing overhead…………………………………………….. $102,300 Fixed selling and administrative expenses……………………………… 187,800 Requirements 1. What is the company’s contribution margin per unit? Contribution margin percentage? Total contribution margin? 2. What would the company’s monthly operating income be if it sold 160,000 units? 3. What would the company’s monthly operating income be if it had sales of $4,000,000? 4. What is the break-even point in units? In sales dollars? 5. How many units would the company have to sell to earn a target monthly profit of $260,100? 6. Management is currently in contract negotiations with the labour union. If the negotiations fail, direct labour costs will increase by 10% a

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *