(Solved by Humans)-Problem 4-51 Contribution Margin, Cost-Volume-Profit, Margin of Safety Candyland Inc. produces a...

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Problem 4-51        Contribution Margin, Cost-Volume-Profit, Margin of Safety Candyland Inc. produces a particularly rich praline fudge. Each 10-ounce box sells for $5.60. Variable unit costs are as follows:       Pecans $0.70 Sugar 0.35 Butter 1.85 Other ingredients 0.34 Box, packing material 0.76 Selling commission 0.20 Fixed overhead cost is $32,300 per year. Fixed selling and administrative costs are $12,500 per year. Candyland sold 35,000 boxes last year. Required: 1.       What is the contribution margin per unit for a box of praline fudge? What is the contribu- tion margin ratio? 2.       How many boxes must be sold to break even? What is the break-even sales revenue? 3.       What was Candyland’s operating income last year? 4.       What was the margin of safety? 5.       CONCEPTUAL CONNECTION Suppose that Candyland Inc. raises the price to $6.20 per box but anticipates a sales drop to 31,500 boxes. What will be the new break-even point in units? Should Candyland raise the price? Explain.