Purchase Solution

New Contribution Margin

Not what you're looking for?

Ask Custom Question

A company sold 5,000 units for a price of $50 per unit and had the following information:

If the sales price per unit were to increase by 10%, variable expenses were to increase by 12.5% and fixed expenses were to increase by 20%, what would be the new contribution margin?

Purchase this Solution
Solution Summary

This solution calculates the new contribution margin for a company that increases its sales price per unit.

Purchase this Solution
Free BrainMass Quizzes
Motivation

This tests some key elements of major motivation theories.

Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Introduction to Finance

This quiz test introductory finance topics.

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.

View More Free Quizzes
Related BrainMass Solutions

  • Vortex Inc.

    the contribution margin per unit and break-even point in terms of units if the new technology is bought.

  • Step-wise answer to Contribution Margin

    New contribution margin is $95,000 This solution explains how to calculate the new contribution margin given the changes.

  • Compute break-even point, contribution margin per unit, operating income

    Calculate the firm's contribution margin per unit and break-even point in terms of units if the new machine is purchased.

  • Relevant and non-relevant costs

    Revised contribution margin = selling price per unit-new variable cost per unit. =$15-9.5(4+3.3+2.2) =$5.5 per unit Therefore, increase in labor costs and the increase in fuel cost can be incorporated into the contribution margin formula in the above

  • Studying effects of change in cost structure

    of sales=2400*1.25=3000 units New Variable costs=330*3000=$990,000 New contribution Margin=New Revenue-New Variable Costs =1980000-990000 =$990000 New CM Rati0=New contribution

  • CVP Ananlysis

    Calculate the firm's current contribution margin per unit and break-even point in units. (b.) Calculate the firm's contribution margin per unit and break-even point in terms of units if the new machine is purchased. (c.)

  • Evaluating a Business: Andre's Hair Styling

    detailed calculations and explanation for both old and new contribution margin and annual breakeven point.

  • Quality improvement:Relevant costs and relevant revenue

    After implementing new design full capacity can be used to produce V262 Contribution margin of V262 $8 per unit Number of units produced 330000 Total contribution = $8*330,000 $2,640,000 Difference in total contribution = after new design

  • Breakeven and Target Profit

    This is calculated as Breakeven units = Fixed Costs/Contribution Margin per unit This is because at breakeven units - Fixed Costs = Total Contribution margin (contribution margin per unit X units) Contribution margin per unit = selling price per unit

  • Computing the Contribution Margin and Cont Margin Ratio

    254547 Computing the Contribution Margin and Cont Margin Ratio Fixed expenses for each new edition of the book Copy editing $3,000.00 Art work $1,000.00 Typesetting $36,000.00 Variable expenses per copy of the

View More Related Solutions