Questions
Questions

2025FA_IMC_402-0_SEC20 Practice Exam for Final

Single choice

A retail company sells a specialty beverage for $12.00 per bottle. The current variable cost is $4.50 per bottle, and the company expects the variable cost to increase by 20% next year.   The company plans to sell 60,000 bottles.   Which of the following is closest to the NEW contribution margin per unit and the NEW total contribution margin?  

View Explanation

View Explanation

Verified Answer
Please login to view
Step-by-Step Analysis
To start, identify the key numbers given and what the question asks for. The selling price per bottle is $12.00, and the current variable cost is $4.50, which is expected to rise by 20% next year. The company plans to sell 60,000 bottles, and we need the NEW contribution margin pe......Login to view full explanation

Log in for full answers

We've collected over 50,000 authentic exam questions and detailed explanations from around the globe. Log in now and get instant access to the answers!

Similar Questions

Monash Ltd owns and operates a cricket bat manufacturing plant. The business sold each bat for $80. The fixed plant and equipment costs are $120,000 per annum. Producing each bat incurs $35 of labour cost and $15 of materials. The contribution margin per bat is:

A company sells 100,000 units at a price of $10 per unit. Variable cost per unit is $6, giving a $4 contribution margin per unit. Current fixed costs (including marketing) total $250,000. The company wants to achieve a target profit of $200,000. Marketing proposes a new fixed advertising campaign costing $80,000, which is expected to increase sales volume by 30,000 units.   Which statement best explains whether the company should add the $80,000 fixed marketing spend to reach the target profit?

This is the inaugural year of the Craft Beer Club for beer lovers.  For $43 annual fee, the Craft Beer Club will send three bottles of each of the four different craft beers to your doorstep (12 bottles annually).  Each bottle of beer has a cost of $1.75.  The fixed marketing cost is $72,000 annually. Monthly fixed costs are $24,530. How many subscribers does the Craft Beer club need to sign up annually to earn $60,000 of Profit?   Hint: Prove out your subscriber volume by creating a Contribution Margin Income Statement

The Company is planning its annual budget and is deciding whether to increase its discretionary marketing spending. Marketing is considered a discretionary fixed cost because it does not vary with production or sales in the short term. The company has the following options: Maintain the current marketing budget of $1,500,000. Increase the marketing budget to $2,000,000, with an expected 20% increase in sales. Reduce the marketing budget to $1,000,000, with an expected 10% decrease in sales. Current financial data: Annual Sales Revenue: $10,000,000 Contribution Margin: 40% Fixed Operating Costs (excluding marketing): $2,000,000 Which option should the Company choose to maximize profitability, assuming the sales expectations hold true?

More Practical Tools for Students Powered by AI Study Helper

Join us and instantly unlock extensive past papers & exclusive solutions to get a head start on your studies!