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1 You are given the following information for ABC Corporation: Sales price per unit $50 Variable cost per unit 12 Fixed costs per month $12,000 Calculate the contribution margin ratio
1 You are given the following information for ABC Corporation: Sales price per unit $50 Variable cost per unit 12 Fixed costs per month $12,000 Calculate the contribution margin ratio. (Round your answer to two decimal places.) Select one: a. 64.71% b. 67.86% c. 78.57% d. 82.35%
2
MERNA Manufacturing Company prepares master budget. If the sales volume variance was $16,000 Favorable and the static budget variance was $20,000 Favorable, then the flexible budget variance was ________. Select one: a. $36,000 Unfavorable b. $4,000 Favorable c. $4,000 Unfavorable d. $36,000 Favorable
Expert Solution
1
Contibution margin Ratio = Contribution per unit / Selling price * 100
Contribution per unit = Selling price per unit - Variable cost per unit = 50 - 12 = 38
= (50 - 12) / 50 * 100
= 38/50 * 100
= 76%
2
The correct answer is b.$4000 favourable
Explanation
Flexible budget variance
= static budget variance- sales volume variance
= 20000 f - 16000 f
= 4000 favourable
So the correct answer is $ 4000 favourable
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