3-52 Gross margin and contribution margin. The Museum of America is preparing for its annual appre-ciation dinner for contributing members. Last year, 525 members attended the dinner. Tickets for the dinnerwere $24 per attendee. The profit report for last year's dinner follows.Ticket sales$12,600ba15,300niteCost of dinnertexmon s no beeUNSba AGross marginInvitations and paperworkProfit (loss)(2,700)boo2,500do$ (5,200)This year the dinner committee does not want to lose money on the dinner. To help achieve its goal, the com-mittee analyzed last year's costs. Of the $15,300 cost of the dinner, $9,000 we re fixed costs and $6,300 werevariable costs. Of the $2,500 cost of invitations and paperwork, $1,975 were fixed and $525 were variable.1. Prepare last year's profit report using the contribution margin format.2. The committee is considering expanding this year's dinner invitation list to include volunteer members(in addition to contributing members). If the committee expands the dinner invitation list, it expects at-tendance to double. Calculate the effect this will have on the profitability of the dinner assuming fixedCosts will be the same as last year.

An Income Statement prepared on the basis of Contribution Margin discloses the costs separately as…

Answered: 3-52 Gross margin and contribution…

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter11: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 11.1E: Classify costs Following is a list of various costs incurred in producing and selling college...

See similar textbooks

Similar questions

The Museum of America is preparing for its annual appreciation dinner for contributing members. Last year, 525 members attended the dinner. Tickets for the dinner were $24 per attendee. The profit report for last year’s dinner follows.Ticket sales $12,600 Cost of dinner 15,300 Gross margin (2,700) Invitations and paperwork 2,500 Profit (loss) $ (5,200) This year the dinner committee does not want to lose money on the dinner. To help achieve its goal, the committee analyzed last year’s costs. Of the $15,300 cost of the dinner, $9,000 were fixed costs and $6,300 were variable costs. Of the $2,500 cost of invitations and paperwork, $1,975 were fixed and $525 were variable Q.Prepare last year’s profit report using the contribution margin format.
The Museum of America is preparing for its annual appreciation dinner for contributing members. Last year, 525 members attended the dinner. Tickets for the dinner were $24 per attendee. The profit report for last year’s dinner follows.Ticket sales $12,600 Cost of dinner 15,300 Gross margin (2,700) Invitations and paperwork 2,500 Profit (loss) $ (5,200) This year the dinner committee does not want to lose money on the dinner. To help achieve its goal, the committee analyzed last year’s costs. Of the $15,300 cost of the dinner, $9,000 were fixed costs and $6,300 were variable costs. Of the $2,500 cost of invitations and paperwork, $1,975 were fixed and $525 were variable Q.The committee is considering expanding this year’s dinner invitation list to include volunteer members (in addition to contributing members). If the committee expands the dinner invitation list, it expects…
A Corporation budgets fixed expenses of $250,000: variable expenses of $180,000 and a sale of 15,000 units for $28 each. If the Company could increase its selling price by $2 each and decrease its variable expenses to $150,000, the number of units to be sold in order to break-even would be a. 12,500 units b. 13,889 units c. 12,863 units d. 14,463 units
3-16 Jack’s Jax has total fixed costs of $25,000. If the company’s contribution margin is 60%, the incometax rate is 25% and the selling price of a box of Jax is $20, how many boxes of Jax would the company needto sell to produce a net income of $15,000?a. 5,625 b. 4,445c. 3,750 d. 3,3333-17 During the current year, XYZ Company increased its variable SG&A expenses while keeping fixedSG&A expenses the same. As a result, XYZ’s:a. Contribution margin and gross margin will be lower.b. Contribution margin will be higher, while its gross margin will remain the same.c. Operating income will be the same under both the financial accounting income statement and contributionincome statement.d. Inventory amounts booked under the financial accounting income statement will be lower than underthe contribution income statement.3-18 Under the contribution income statement, a company’s contribution margin will be:a. Higher if fixed SG&A costs decrease.b. Higher if variable SG&A costs…
Company X reports $200,000 in sales of Widgets in 2019. The Costs of Goods sold for these Widgets is $90,000. All other operating expenses (SG&A, R&D, Depreciation, Other, etc.) are $50,000. Which of the following is the correct representation of the profitability ratios: Gross Profit Margin 45%, Operating Margin 30%. Gross Profit Margin 55%, Operating Margin 30%. Gross Profit Margin 45%, Operating Margin 20%. Gross Profit Margin 55%, Operating Margin 20%.
ngberg Company installs lawn sod in home yards. The company’s most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 145,000 100 % Variable expenses 58,000 40 % Contribution margin 87,000 60 % Fixed expenses 22,000 Net operating income $ 65,000 Using the degree of operating leverage, estimate the impact on net operating income of a 23% increase in sales. (Do not round intermediate calculations. Round your percentage answer to 2 decimal places (i.e 0.1234 should be entered as 12.34).) Net operating income increases by %
The follooving information relates to Snorbird Corporation Sales at the breakeven point P312.500 lotal foed expenses 250,000 et opetating income 150,000 what is Sncwbird s margin of safety
Assume that projected revenue for 2018 is 1,058,949. Also assume the following projected 2018 costs in each of the cost categories from question one: Packaged (Cans & Bottles) $140,847 Kegs $65,238 Shrinkage/WIP Loss $42,000 Contract Labor $9,000 Direct Labor $240,000 Freight $18,000 Consumer Advertising $30,000 Trade Promotion $30,000 Sales Promotion $18,000 Salaries & Benefits $180,000 Given these costs, compute Shannon’s projected contribution in dollars.
A school is raising money to buy robes. Cost is $8,000. Raffle tickets are sold for $10. Variable cost is $2 and fixed cost is$8,000. Determine sales volume required for target income.
3-35 Contribution margin, decision making. Welch Men’s Clothing’s revenues and cost data for 2017 areas follows:Revenues $600,000Cost of goods sold (all variable costs) 300,000Gross margin 300,000Operating costs:Salaries fixed $140,000Sales commissions (12% of sales) 72,000Depreciation of equipment and fixtures 10,000Store rent ($3,500 per month) 42,000Other operating costs 45,000 309,000Operating income (loss) $ (9,000)Mr. Welch, the owner of the store, is unhappy with the operating results. An analysis of other operatingcosts reveals that it includes $30,000 variable costs, which vary with sales volume, and $15,000 (fixed) costs.1. Compute the contribution margin of Welch Men’s Clothing.2. Compute the contribution margin percentage.3. Mr. Welch estimates that he can increase units sold, and hence revenues by 25% by incurring additionaladvertising costs of $8,000. Calculate the impact of the additional advertising costs on operatingincome.4. What other actions can Mr. Welch take to…
A company's contribution margin income statement showed net operating income of $9,000 and fixed expenses of $20,000. How much contribution margin did the company earn? a. $29,000 b. $11,000 c. $19,000 d. $14,000 Note to student: See Guidance Answers online.
Fourth Street Lighting shows a net income of $224 000 for the previous year. If the contribution rate for the store was 40.3%, and the fixed cost was $315 000, what were last year’s sales?

SEE MORE QUESTIONS

Recommended textbooks for you

Survey of Accounting (Accounting I)

Accounting

ISBN:

9781305961883

Author:

Carl Warren

Publisher:

Cengage Learning

Cornerstones of Cost Management (Cornerstones Ser…

Accounting

ISBN:

9781305970663

Author:

Don R. Hansen, Maryanne M. Mowen

Publisher:

Cengage Learning

SWFT Individual Income Taxes

Accounting

ISBN:

9780357391365

Author:

YOUNG

Publisher:

Cengage

Survey of Accounting (Accounting I)

Accounting

ISBN:

9781305961883

Author:

Carl Warren

Publisher:

Cengage Learning

Cornerstones of Cost Management (Cornerstones Ser…

Accounting

ISBN:

9781305970663

Author:

Don R. Hansen, Maryanne M. Mowen

Publisher:

Cengage Learning

SWFT Individual Income Taxes

Accounting

ISBN:

9780357391365

Author:

YOUNG

Publisher:

Cengage

SWFT Comprehensive Vol 2020

Accounting

ISBN:

9780357391723

Author:

Maloney

Publisher:

Cengage

Managerial Accounting: The Cornerstone of Busines…

Accounting

ISBN:

9781337115773

Author:

Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS