3.1 REQUIRED Calculate the following from the information given below: 3.1.1 Break-even quantity 3.1.2 Break-even value using the marginal income ratio 3.1.3 Margin of safety (in Rands) 3.1.4 Total Marginal Income and Net Profit/Loss if the sales price is reduced to R90 per unit. INFORMATION Dynamo Ltd manufactures calculators. The following information was extracted from the budget for the year ended 31 December 2023: Sales volume Selling price per unit Variable manufacturing cost per unit Variable marketing cost per unit Fixed manufacturing cost Fixed administration and marketing costs 20 000 units R100 R50 10% of the unit selling price R400 000 R200 000

3.1 REQUIRED Calculate the following from the information given below: 3.1.1 Break-even quantity 3.1.2 Break-even value using the marginal income ratio 3.1.3 Margin of safety (in Rands) 3.1.4 Total Marginal Income and Net Profit/Loss if the sales price is reduced to R90 per unit. INFORMATION Dynamo Ltd manufactures calculators. The following information was extracted from the budget for the year ended 31 December 2023: Sales volume Selling price per unit Variable manufacturing cost per unit Variable marketing cost per unit Fixed manufacturing cost Fixed administration and marketing costs 20 000 units R100 R50 10% of the unit selling price R400 000 R200 000

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 34P: Hammond Company runs a driving range and golf shop. The budgeted income statement for the coming...

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Hammond Company runs a driving range and golf shop. The budgeted income statement for the coming year is as follows. Required: 1. What is Hammonds variable cost ratio? Its contribution margin ratio? 2. Suppose Hammonds actual revenues are 200,000 greater than budgeted. By how much will before-tax profits increase? Give the answer without preparing a new income statement. 3. How much sales revenue must Hammond earn in order to break even? What is the expected margin of safety? (Round your answers to the nearest dollar.) 4. How much sales revenue must Hammond generate to earn a before-tax profit of 130,000? An after-tax profit of 90,000? (Round your answers to the nearest dollar.) Prepare a contribution margin income statement to verify the accuracy of your last answer.
Finance management PnA calculators. The following information was extracted from the budget for the yearended 31 December 2023: $Sales 10 400Selling price per calculator350Variable production cost per unit216Fixed production costs154 000Variable selling and administrative costs per unit29Fixed selling and administrative costs82 000 Calculate the following:a) Break-even quantityb) Break-even value using the marginal income ratioc) Margin of safety (in terms of units)d) Expected total marginal income and net profit
Use the information provided below to calculate the following independently: 3.1 Break - even quantity 3.2 Margin of safety (in Rands) 3.3 The selling price per unit that will enable the company to break even 3.4 Total Marginal Income and net Profit/Loss if the sales Volume is 10% less than the budgeted figure. 3.5 The number of units that must be sold to earn a net profit of R811 000, if the selling price increases by R20 per unit and the variable costs increase by 10% Information The following budgeted information was extracted from the budget of Brad Manufacturers: Sales 30000 units Selling price per unit R220 Direct materials cost per unit R30 Direct labour cost per unit R20 Variable manufacturing overheads cost per unit R10 Fixed manufacturing costs R1 800000 Variable cost per unit R40 Fixed marketing and administration costs R600000
3. The relationship between the advertising budget (x, in $ millions) and sales (y, in $ billions) of a retailer can be expressed by the following regression model. The advertising budget of last year is $2 million, and the advertising budget for this year is expected to decrease by 25%, what would be the forecast for this year’s sales? And what is the percent change in sales compared to last year?y = 1.6 + 0.7x Select one: a. $2.65 billion; decreased about 13.2%. b. $3.35 billion; increased about 10.14%. c. $2.65 billion; decreased about 11.7%. d. $2.75 billion; decreased about 8.3%. e. $3.35 billion; increased about 11.7%
3.1 REQUIRED Calculate the following from the information given below: 3.1.1 Break-even quantity. 3.1.2 Break-even value using the marginal income 3.1.3 Margin of safety 3.1.4 Total Marginal Income and Net Profit/Loss if the sales price is reduced to R90 per unit.INFORMATION Dynamo Ltd manufactures calculators. The following information was extracted from the budget for the year ended 31 December 2023: Sales volume 20 000 units Selling price per unit R100 Variable manufacturing cost per unit R50 Variable marketing cost per unit 10% of the unit selling price Fixed manufacturing cost R400 000 Fixed administration and marketing costs R200 000
Sales Revenue Approach, Variable Cost Ratio, Contribution MarginRatioArberg Company’s controller prepared the following budgeted income statement for thecoming year: Required:1. What is Arberg’s variable cost ratio? What is its contribution margin ratio?2. Suppose Arberg’s actual revenues are $30,000 more than budgeted. By how much willoperating income increase? Give the answer without preparing a new income statement.3. How much sales revenue must Arberg earn to break even? Prepare a contribution marginincome statement to verify the accuracy of your answer.4. What is Arberg’s expected margin of safety?5. What is Arberg’s margin of safety if sales revenue is $380,000?
1. Maju Sdn. Bhd. produces and sells pillows for RM25 per unit. Maju's sales revenue was RM350,000 and its net operating income was RM25,200 for the year. If its fixed costs totalled to RM100,800 for the year, what is its break-even point in units? Select one: A. 14,000 units. B. 1,008 units. C. 4,032 units. D. 11,200 units. 2. Which of the following would improve budgeting process? Select one: A. Only top management officials handle the budgeting process. B. Set a very high-performance standards that all stakeholders must achieve. C. Ensure early and consistent communications throughout the budgeting process. D. Top management must conduct lengthy meetings once a week. 3. The effect of a payment of accounts payable will appear in _______________ Select one: A. the Statement of Financial Position. B. the Statement of Profit or Loss and Other Comprehensive Income. C. the Statement of Profit or Loss and Other Comprehensive Income and the Statement of Financial Position. D. the…
QUESTION2 A company manufactures a single product. Budget and Standard cost details for next year include: Selling Price per unit R24.00 Variable Production cost per unit R8.60 Fixed production costs R650 000 Fixed selling and distrivution costs R230 400 Sales commission 5% of selling price Sales 90 000 units Required 1. Calculate the break-even point in units 2. Calculate the breakeven point in rands 3. Calculate the percentage by which the budgeted sales can fall before The company begins to make a loss 4. The marketing manager has suggested that the selling price per unit can be increased to R25.00.If the sales…
using the information below answer 3.1 and 3.2 3.1 Calculate the total Marginal Income and Net Profit/Loss if all the tables are sold. 3.2 Use the marginal income ratio to calculate the break-even value. INFORMATIONSamcor Limited manufactures tables. The following information was extracted from the budget for the year ended 30June 2022:1. Total production and sales 2 400 units2. Selling price per table R1 2003. Variable manufacturing costs per table: Direct material R288 Direct labour R192 Overheads R964. Fixed manufacturing overheads R216 9605. Other costs: Fixed marketing and administrative costs R144 000 Sales commission 5%
Break-Even in Sales Revenue, Variable-Costing Ratio, Contribution Margin Ratio, Margin of Safety Hammond Company runs a driving range and golf shop. The budgeted income statement for the coming year is as follows. Sales $1,240,000 Less: Variable expenses 706,800 Contribution margin $533,200 Less: Fixed expenses 425,000 Income before taxes $108,200 Less: Income taxes 43,280 Net income $64,920 1. What is Hammond’s variable cost ratio? Enter your answer as a decimal value rounded to two decimal places. What is the contribution margin ratio? Enter your answer as a decimal value rounded to two decimal places. (Express as a decimal-based amount rather than a whole percent.)f 2. Suppose Hammond’s actual revenues are $200,000 greater than budgeted. By how much will before-tax profits increase? Calculate the answer without preparing a new income statement. 3. How much sales revenue must Hammond earn in order to break even? Round your answer to the nearest dollar. What…
Arberg Company's controller prepared the following budgeted income statement for the coming year: Sales ........................$415,000 Total variable cost .........302,950 Contribution margin......$112,050 Total fixed cost ..............64,800 Operating income .........$47,250 Required: 1. What is Arberg's variable cost ratio? What is its Contribution marginratio? 2. Suppose Arberg's actual revenues are $30,000 more than budgeted. By how much will operating income increase? Give the answer without preparing a new income statement. 3. How much sales revenue must Arberg earn to break even? Prepare a Contribution marginincome statement to verify the accuracy of your answer. 4. What is Arberg's expected margin of safety? 5. What is Arberg's margin of safety if sales revenue is $380,000?
P Company has provided the following data: Sales Price per unit: $50. Variable Cost per unit: $30; Fixed Cost: $135,000 Expected Sales: 20,000 units. a. What is the breakeven point in sales dollars? b. What is the break-even point in units? c. Calculate the expected profit.