10. The income statement for Jeeves Ltd for 2015 is shown below: Sales (100 000 units) $40 000 Variable cost $24 000 Contribution margin $16 000 Fixed costs $12 000 Net Income 5 4000 What is the contribution margin ratio? A 10% В. 30% C. 40% D. 60% 11. What is the difference between total sales in dollars and total variable expenses called ANet operating income B. Net profit C. The gross margin D. The contribution margin 12. How is the margin of safety computed? A Break-even'total sales R Total sulri. Brakuom alm

10. The income statement for Jeeves Ltd for 2015 is shown below: Sales (100 000 units) $40 000 Variable cost $24 000 Contribution margin $16 000 Fixed costs $12 000 Net Income 5 4000 What is the contribution margin ratio? A 10% В. 30% C. 40% D. 60% 11. What is the difference between total sales in dollars and total variable expenses called ANet operating income B. Net profit C. The gross margin D. The contribution margin 12. How is the margin of safety computed? A Break-even'total sales R Total sulri. Brakuom alm

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 20MC: Wallace Industries has total contribution margin of $58,560 and net income of $24,400 for the month...

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Wallace Industries has total contribution margin of $58,560 and net income of $24,400 for the month of April. Wallace expects sales volume to increase by 5% in May. What are the degree of operating leverage and the expected percent change in income for Wallace Industries? 0.42 and 2.2% 0.42and5% 2.4andl2% 2.Sandl3%
Company A has current sales of $4,000,000 and a 45% contribution margin. Its fixed costs are $600,000. Company B is a service firm with current service revenue of $2,800,000 and a 15% contribution margin. Company Bs fixed costs are $375,000. Compute the degree of operating leverage for both companies. Which company will benefit most from a 15% increase in sales? Explain why.
If a firm has a contribution margin of $78M90 and a net income of $13,700 for the current month, what is their degree of operating leverage? 0.21 1.21 2.4 5.7
Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?
The sales price per unit is 13 for the Voyageur Companys only product. The variable cost per unit is 5. In 2016, the company sold 80,000 units, which was 10,000 units above the break-even point. Compute the following: 1. Total fixed expenses. (Hint: First compute the contribution margin per unit.) 2. Total variable expense at the break-even volume.
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Ma2. Q4 Bundoora Enterprises operates a single-product entity. Data relating to the product for 2020 were as follows: Annual Volume 45,000 Units Selling price per unit $65 Variable manufacturing cost per unit $25 Annual fixed manufacturing costs $155,000 Variable marketing and distribution costs per unit $15 Annual fixed non-manufacturing costs $445,000 a) Calculate and interpret the break-even in units for 2020. b) Calculate and interpret the margin of safety in both units and sales dollars. c) Calculate and interpret the profit achieved in 2020.d) Changes in marketing strategy are planned for 2021. This would increase variable marketing and distribution costs by $15 per unit and reduce fixed non-manufacturing costs by $100,000 per year. Calculate and interpret the units that would need to be sold in 2021 to achieve the same profit as in 2020.
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Company XYZ is producing and selling 2,500 . At this level , the selling price per unit is $10, the variable expenses per unit is $3 and fixed expenses are \$1,5 . How much is the profit ? a. $ 6,000 b. $11,000 c. 8,500 d. 16,000 e.13,500
Whirly Corporation’s most recent income statement is shown below:Total Per UnitSales (10,000 units) ..................... $350,000 $35.00Variable expenses ....................... 200,000 20.00Contribution margin ..................... 150,000 $15.00Fixed expenses ........................... 135,000Net operating income .................. $ 15,000Required:Prepare a new contribution format income statement under each of the following conditions (consider eachcase independently):1. The sales volume increases by 100 units.2. The sales volume decreases by 100 units.3. The sales volume is 9,000 units.
The following pertained to Lomi Inc.: Product Sales Price Unit Variable Cost Projected sales A P50 P34 5,000 units B 20 15 25,000 units C 25 16 20,000 units Fixed costs amounted to P154,000. Instructions: 2. Describe its net income if the sales mix will be based on peso sales. Why is the result not applicable in aiding management in decision-making?