Ch10_Solution- Holden book Ch16
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Illinois State University *
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341
Subject
Accounting
Date
May 4, 2024
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xlsx
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Uploaded by DoctorHippopotamus9533
Based On Accounting Profit
Inputs
Fixed Costs
$30,000 30
Sales Revenue / Unit
$6.00 6
Variable Costs / Unit
$4.00 4
Calculate the Break-even Point using the Formula
Break-even Point (Unit Sales)
15,000
Break-Even point (units) = Fixed Costs ÷ (Sales revenue per unit – Variable costs per u
Back solve for the Break-even Point using the Income Statement
Unit Sales
12,000
Sales Revenue
$72,000 Variable Costs
$48,000 Gross Margin
$24,000 Fixed Costs
$30,000 Accounting Profit
($6,000)
B
REAK-
E
VEN
A
NALYSIS
0 5,000 10,000 15,000 20,000 ($60,000)
($30,000)
$0 $30,000 $60,000 $90,000 $120,000 $150,000 Break-Even Point Based On Acct. Profit = 0
Total Costs
Sales Revenue
Account-
ing Profit
Unit Sales
)
7
(
Gross Margin - Fixed Costs
Enter =B21-B22
)
7
(
Gross Margin - Fixed Costs
Enter =B21-B22
Data Table: Sensitivity of Costs, Revenues, and Acct. Profit to Unit Sales
Input Values for Unit Sales
Output Formulas:
0 5,000 10,000 15,000 20,000 Total Costs
$78,000 Sales Revenue
$72,000 Accounting Profit
($6,000)
($30,000)
($20,000)
($10,000)
$0 $10,000
and generates sales revenue of $6.00 per unit. What is the break-even point in
unit sales, where accounting profit exactly equals zero, and what is the intuition
for it?
formula. Second, we use Excel's Solver to back solve for the break-even point
using the income statement. Lastly, we will determine the sensitivity of costs,
revenues, and accounting profits to unit sales. This will allow us to graphically
illustrate the intuition of the break-even point.
unit) Problem
. A project has a fixed cost of $30,000, variable costs of $4.00 per unit,
Solution Strategy
. First, we solve for the break-even point in unit sales using the
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Related Questions
Use the following data to compute the selling price on these financial accounting
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Compute for what is being asked1. Unit selling price P800 unit variable cost P350 annual sales volume, 620 units, fixed costs and expenses P200,000 per year. Compute the following.a. Contribution margin per unitb. Contribution margin percentagec. BEP sales volume (units)d. BEP peso salee. Operating income (BIT)using the break even salef. Operating income (EBIT) using the annual sales volume
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Complete the Table
Total Total Unit Selling Total
Fixed Variable Variable Price Revenue of
Costs Costs
Cost
Output
?
?
$5,000 $6,600
$2,000
?
$18,000
?
2
$45,000
?
$94,050
?
$5
?
?
?
$75.24
$13
$10
$75
?
?
2
?
$10,000
$60,000
Level Net
Income Rate
$4,000
?$14,500
$84,600
1,800
$78,000 3,000 $18,000
?
?-$19,500
Contribution Unit
Show Transcribed Text
?
?
35%
?
38%
Contribution
Margin
$7.50
?
$13
?
can anyone help me doing this in easiest and
less confusing way
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You are provided with the following data.
I Unit sales
5 Selling price per unit
5
7
8
Variable expenses per unit
Fixed expenses
Target Profit
9
10 Required:
11
12
13 Contribution margin per unit
14
15 CM ratio
16 Variable expense ratio
17
18 Compute the break-even.
19
20
Break-even in unit sales
$
Dagate
ssss is
$
80,000 units
70 per unit
28 per unit
Compute the CM ratio and variable expense ratio.
$ 2,688,000
$ 1,610,000
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Data Inputs:
Unit sales
Selling price per unit
Variable expense per unit
Total fixed expenses
Sales
Variable expenses
Contribution margin
Fixed expenses
Net operating income
Net profit margin percentage
CVP Graph Information
Selling price per unit
Variable expense per unit
Total fixed expenses
CVP Graph Table
CVP Graph
$
$
S
Contribution Format Income Statement
Per Unit
$
40,000
12.50
7.50
180,000
$
Total
500,000 $
300,000
200,000 $
180,000
20,000
4.00%
$
$
S 180,000
12.50
7.50
Units
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
12.50
7.50
5.00
Donaldson Company
%
100%
60%
40%
Variable Expenses Fixed Expenses Total Expenses Sales dollars
Margin of Safety
Actual sales (a)
Break-even sales (b)
Margin of safety in dollars (a)-(b)
Margin of safety percentage
$
$
$
500,000
450,000
50,000
10.00%
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• Use the below information to fill out the income statement and answer the questions 4-10
below:
Selling Price per Unit
Number of Units
Total Dollars
Sales Revenue
$40.00
Variable Costs
|600,000
Contribution Margin
Fixed Costs
240,000
Net Income
If OPEARATING LEVERAGE is 5
4. What is Net Income ?
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In the cost-volume- profit graph (above), what is represented by the point marked "B"?
Question 2 options:
Breakeven point
Fixed expenses
Operating income area
Operating loss area
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solve this account query
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Compute the contribution margin ratio and fixed costs using the following data.
Sales $4,600 Variable costs
$ 2,944 Income
$ 540
Less:
Sales
Variable cost
Contribution margin
Numerator:
Fixed Cost
1
Contribution Margin
$
Contribution Margin Ratio
Denominator:
1
4,600
2,944
=
Contribution Margin Ratio
Contribution margin ratio
0
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PE 1. Use the following economic data to answer the numbered
questions:
Total fixed costs
P1.8M
Unit selling price
P80.00
Unit variable cost
P56.00
Indicate the effect on the following by one unit increase in sales
volume:
1. Breakeven units
Total peso sales
3. Total contribution margin
4. Operating profit
5. Total costs
2.
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Compute the contribution margin ratio and fixed costs using the following data.
Sales $ 5,900 Variable costs
$ 3,009 Income $ 490
Less:
Sales
Variable cost
Contribution margin
Numerator:
Contribution margin
$
Fixed Cost
5,900
3,009
$
2,891
Contribution Margin Ratio
Denominator:
1
Contribution Margin
$
/Sales
$
$
2,891 /
5,900
490
=
11
Contribution Margin Ratio
Contribution margin ratio
49 %
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Assume the following information:
Sales
Variable expenses
Contribution margin
Fixed expenses
Net operating income
What is the margin of safety in dollars?
Amount
$300,000
120,000
180,000
60,000
$ 120,000
Per Unit
$40
16
$24
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Wesley's income statement is as follows:
Sales (10,000 units)
Less variable costs
Contribution margin
Less fixed costs
Net income
$150,000
- 48,000
$102,000
- 24,000
$ 78,000
What is the unit contribution margin?
A. $12.00
B. $ 7.20
C. $ 4.80
D. $10.20
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Need help with this accounting question
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I'se the following information to answer questions 1-6.
Selling price per unit
Luriable manufacturing cost per unit
Fixed manufacturing cost per unit
V'ariable selling cost per unit
Fixed selling cost per unit
Expected production and sales
P100
20
30
25
10
1,000 units
1. Contribution margin per unit is
a. P50
b. P55
с. Р80
d. P15
2. The contribution margin ratio is
a. 45%
b. 50%
c. 55%
d. 15%
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Matamad Inc. Provides you with the following data on its operation for analysis:Unit selling priceP40Variable costs and expenses per unit.P30Fixed cost and expenses per annum.P48,000REQUIRED:a. Contribution margin per unitb. Contribution margin percentagec. BEP sales volume (units)d. BEP peso salese. Peso sales with desired income of P9,000f. Peso sales with desired income P13,000 after 32% income tax
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Cost Volume Profit (CVP) Relationships (Algo)
You are provided with the following data.
Unit sales
Selling price per unit
Variable expenses per unit
Fixed expenses
Target Profit
80,000 units
$70 per unit
$ 28 per unit
$ 2,688,000
$ 1,610,000
Required:
Compute the CM ratio and variable expense ratio.
Compute the break-even.
Compute the target profit.
Compute the margin of safety with the original data.
Compute the degree of operating leverage with the original data.
Use the Degree of Operating Leverage to determine the new Net Operating Income if sales increase by: 16%
1. Use the Open Excel in New Tab button to launch this question.
2. When finished in Excel, use the Save and Return to Assignment button in the lower right to return to Connect.
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Total Sales are 500,000 OMR, Total Variable
cost is 150000 OMR. Fixed cost is 200000
OMR Calculate Total profit
Select one:
O a. 265000 OMR
O b. 180000 OMR
O c. 150000 OMR
O d. 500000 OMR
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Answer the following questions based on the given information:
Sales Units
500,000
Total Sales
$50,000,000
Total Variable Cost
$35,000,000
Total Fixed Cost
$10,000,000
What is Total Contribution Margin?
What is Contribution Margin Per Unit?
What is the Contribution Margin Ratio?
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1. prepare an estimated income statement for 20Y7.
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don't give answer in image format
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In the cost-volume- profit graph (above), what is represented by the point marked "D"?
Question 3 options:
Operating loss area
Operating income area
Breakeven point
Fixed expenses
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Given the following information for SAMAH Company, answer the following questions:
RO 260
840 Units
RO 145
R.O 620,000
Selling price (per unit)
Number of units sold
Variable cost (per unit)
Fixed cost
1. Calculate contribution margin ratio
2. Find Breakeven Point in amount
3. Find Breakeven Point in units
P
=1
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If the selling price per unit is $15, the unit contribution margin is $5, and total fixed expenses are $14,500, what are the breakeven sales in units?
A. 966.6667
B. 2,900
C. 72,500
D. 217,500
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Compute the contribution margin ratio and fixed costs using the following data.
Sales $5,200 Variable costs $3,016 Income $ 420
Contribution margin
Numerator:
Fixed Cost
Contribution Margin
Contribution Margin Ratio
Denominator:
=
Contribution Margin Ratio
Contribution margin ratio
0
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Assume the following information:
Selling price
Variable expense ratio
Fixed expenses
Unit sales
Multiple Choice
O
O
How many units need to be sold to achieve a target profit of $16,900?
4,150 units
1,019 units
2,817 units
Amount
6,220 units
$30
80%
$ 8,000 per month
3,400 per month
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Related Questions
- Use the following data to compute the selling price on these financial accountingarrow_forwardCompute for what is being asked1. Unit selling price P800 unit variable cost P350 annual sales volume, 620 units, fixed costs and expenses P200,000 per year. Compute the following.a. Contribution margin per unitb. Contribution margin percentagec. BEP sales volume (units)d. BEP peso salee. Operating income (BIT)using the break even salef. Operating income (EBIT) using the annual sales volumearrow_forwardComplete the Table Total Total Unit Selling Total Fixed Variable Variable Price Revenue of Costs Costs Cost Output ? ? $5,000 $6,600 $2,000 ? $18,000 ? 2 $45,000 ? $94,050 ? $5 ? ? ? $75.24 $13 $10 $75 ? ? 2 ? $10,000 $60,000 Level Net Income Rate $4,000 ?$14,500 $84,600 1,800 $78,000 3,000 $18,000 ? ?-$19,500 Contribution Unit Show Transcribed Text ? ? 35% ? 38% Contribution Margin $7.50 ? $13 ? can anyone help me doing this in easiest and less confusing wayarrow_forward
- You are provided with the following data. I Unit sales 5 Selling price per unit 5 7 8 Variable expenses per unit Fixed expenses Target Profit 9 10 Required: 11 12 13 Contribution margin per unit 14 15 CM ratio 16 Variable expense ratio 17 18 Compute the break-even. 19 20 Break-even in unit sales $ Dagate ssss is $ 80,000 units 70 per unit 28 per unit Compute the CM ratio and variable expense ratio. $ 2,688,000 $ 1,610,000arrow_forwardData Inputs: Unit sales Selling price per unit Variable expense per unit Total fixed expenses Sales Variable expenses Contribution margin Fixed expenses Net operating income Net profit margin percentage CVP Graph Information Selling price per unit Variable expense per unit Total fixed expenses CVP Graph Table CVP Graph $ $ S Contribution Format Income Statement Per Unit $ 40,000 12.50 7.50 180,000 $ Total 500,000 $ 300,000 200,000 $ 180,000 20,000 4.00% $ $ S 180,000 12.50 7.50 Units 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 12.50 7.50 5.00 Donaldson Company % 100% 60% 40% Variable Expenses Fixed Expenses Total Expenses Sales dollars Margin of Safety Actual sales (a) Break-even sales (b) Margin of safety in dollars (a)-(b) Margin of safety percentage $ $ $ 500,000 450,000 50,000 10.00%arrow_forward• Use the below information to fill out the income statement and answer the questions 4-10 below: Selling Price per Unit Number of Units Total Dollars Sales Revenue $40.00 Variable Costs |600,000 Contribution Margin Fixed Costs 240,000 Net Income If OPEARATING LEVERAGE is 5 4. What is Net Income ?arrow_forward
- In the cost-volume- profit graph (above), what is represented by the point marked "B"? Question 2 options: Breakeven point Fixed expenses Operating income area Operating loss areaarrow_forwardsolve this account queryarrow_forwardCompute the contribution margin ratio and fixed costs using the following data. Sales $4,600 Variable costs $ 2,944 Income $ 540 Less: Sales Variable cost Contribution margin Numerator: Fixed Cost 1 Contribution Margin $ Contribution Margin Ratio Denominator: 1 4,600 2,944 = Contribution Margin Ratio Contribution margin ratio 0arrow_forward
- PE 1. Use the following economic data to answer the numbered questions: Total fixed costs P1.8M Unit selling price P80.00 Unit variable cost P56.00 Indicate the effect on the following by one unit increase in sales volume: 1. Breakeven units Total peso sales 3. Total contribution margin 4. Operating profit 5. Total costs 2.arrow_forwardCompute the contribution margin ratio and fixed costs using the following data. Sales $ 5,900 Variable costs $ 3,009 Income $ 490 Less: Sales Variable cost Contribution margin Numerator: Contribution margin $ Fixed Cost 5,900 3,009 $ 2,891 Contribution Margin Ratio Denominator: 1 Contribution Margin $ /Sales $ $ 2,891 / 5,900 490 = 11 Contribution Margin Ratio Contribution margin ratio 49 %arrow_forwardAssume the following information: Sales Variable expenses Contribution margin Fixed expenses Net operating income What is the margin of safety in dollars? Amount $300,000 120,000 180,000 60,000 $ 120,000 Per Unit $40 16 $24arrow_forward
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