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ACC216Notes–Chapter 5

by: Elijah Duduit

ACC216Notes–Chapter 5 ACC216

Marketplace > Marshall University > Accounting > ACC216 > ACC216Notes Chapter 5
Elijah Duduit
GPA 3.6

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About this Document

Covers break-even analysis, contribution margin ratio, and changes in variable & contribution margin expenses.
Principles of Accounting
Class Notes
25 ?




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This 1 page Class Notes was uploaded by Elijah Duduit on Tuesday February 2, 2016. The Class Notes belongs to ACC216 at Marshall University taught by STAFF in Fall 2015. Since its upload, it has received 27 views. For similar materials see Principles of Accounting in Accounting at Marshall University.


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Date Created: 02/02/16
ACC  216  Notes  –  Ch.  5     Help  with  homework     1.   For  sales:  10,000  +  100  =  10,100  units  x  35.00   For  Variable:  10,100  x  20.00   Fixed  expense  =  135,000     *Apply  same  formulas  for  other  two  parts,  adjust  units  accordingly     2.   Graph  lines  based  on  numbers  given,  find  where  sales  and  total  expense  lines  meet  for  break -­‐ even  point     3.   200,000  –  120,000  =  80,000   80,000/200,000  (answer  will  be  percentage)     pt.  2:    1,000  x  40%     4.   90  x  2000  =  180,000  in  sales   Sales  manager’s  prediction  with  5,000  increase  in  marketing:  189,000   Contribution  margin  =  30%   189,000  x  30%  =  56,700   180,000  x  30%  =  54,000   56,700  –  54,000  =  2,700   2,700  –  5,000       5.   If  variable  price/unit  goes  up  $2,  then  contribution/unit  is  now  $25   10%  x  2000  =  200….200  +  2000  =  2,200   25  x  2,200  =  55,000   27  x  2000  =  54,000   55,000  –  54,000     6.   15  –  12  =  3  (Contribution  margin)….4200/3  =  1,400  (pt.  1)     pt.  2:    4,200/21,000  =  20%....1400  x  15  =  21,000   *repeat  for  parts  3  &  4   *Note  I  only  used  formula  method —much  simpler  than  equation,  in  my  opinion     7.   *Using  formula  method—much  easier   50,000  +  10,000  =  60,000 …..120  –  80  =  40….60,000/40     8.   50,000  +  15,000  =  65,000 ….120  –  80  =  40….165,000/40  =  1,625     9.   30  –  20  =  10….7,500/10  =  750…..750  x  30  =  22,500  (break-­‐even  in  dollars)   1,000  x  30  =  30,000  (total  budgeted  sales)   30,000  –  22,500     pt.  2:    7,500/30,000  (percentage)  


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