A cement manufacturer has supplied the following data

A cement manufacturer has supplied the following data:

Tons of cement produced and sold                                 220,000
Sales revenue                                                                $924,000
Variable manufacturing expense                                    $297,000
Fixed manufacturing expense                                         $280,000
Variable selling and admin expense                                $165,000
Fixed selling and admin expense                                    $82,000
Net operating income                                                     $100,000


a. Calculate the company's unit contribution margin
b. Calculate the company's unit contribution ratio
c. If the company increases its unit sales volume by 5% without increasing its fixed expenses, what would the company's net operating income be?


TUTORIAL PREVIEW
a. Calculate the company's unit contribution margin
Contribution margin = Sales - Variable expenses Contribution margin
         = $924,000 - ($297,000 + $165,000)


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