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##### Magic Manufacturing?s_CM_BEP

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Question;1. Magic Manufacturing?s sales;slumped badly in 2012. For the first time in its history, it operated at a;loss.;The company?s income statement showed the following results from;selling 600,000 units of product;Net sales \$2,400,000, total costs and expenses \$2,525,800, and net loss;\$125,800.;Costs and expenses consisted of the amounts shown below;Total;Variable;Fixed;Cost;of Goods Sold;2,085,300;1,465,600;619,700;Selling;Expenses;243,500;74,200;169,300;Administrative;Expense;197,000;44,200;152,800;2,525,800;1,584,000;941,800;a) Compute the contribution margin;ration.;The Contribution Margin Ratio: _____%;b) Compute the break-even point in dollars for 2012.;The break-even point in dollars: \$;-----------------------------------------------------------------------------------------------------------------------------------------;2. Change the compensation;of salespersons from fixed annual salaries totaling \$153,200 to total;salaries of \$59,100 plus a 3% commission on net sales. Compute the;contribution margin ratio.;Total;Variable;Fixed;Cost;of Goods Sold;2,085,300;1,465,600;619,700;Selling;Expenses;243,500;146,200;16,100;Administrative;Expense;197,000;44,200;152,800;2,525,800;1,656,000;788,600;The Contribution Margin Ratio: _____%

Paper#45172 | Written in 18-Jul-2015

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