Sunland Corporation has collected the following information after its first year of sales. Sales were $1,600,000 on 100,000 units, selling expenses $200,000 (40% variable and 60% fixed), direct materials $508,000, direct labor $290,400, administrative expenses $278,000 (20% variable and 80% fixed), and manufacturing overhead $380,000 (70% variable and 30% fixed). Top management has asked you to do a CVP analysis so that it can make plans for the coming year. It has projected that unit sales will increase by 10% next year.(a) Correct answer iconYour answer is correct.Compute (1) the contribution margin for the current year and the projected year, and (2) the fixed costs for the current year. (Assume that fixed costs will remain the same in the projected year.)(1) Contribution margin for current year $400000 Contribution margin for projected year $ 440000(2) Fixed Costs $ 456400 (b) Correct answer iconYour answer is correct.Compute the break-even point in units and sales dollars for the current year.Break-even point in units 114100 unitsBreak-even point in dollars $ 1825600 eTextbook and Media(c)Your AnswerCorrect Answer (Used) The company has a target net income of $200,000. What is the required sales in dollars for the company to meet its target?Sales dollars required for target net income $2625600 (d) New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect.If the company meets its target net income number, by what percentage could its sales fall before it is operating at a loss? That is, what is its margin of safety ratio? (Round answer to 1 decimal place, e.g. 10.5.)Margin of safety ratio %

Break-even point refers to a point at which the company earns neither profit nor deficit. If the…

Answered: (a) Correct answer icon Your answer…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 13E: Wyandotte Company provided the following information for the last calendar year: During the year,...

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(a)

Correct answer icon

Your answer is correct.

Compute (1) the contribution margin for the current year and the projected year, and (2) the fixed costs for the current year. (Assume that fixed costs will remain the same in the projected year.)

(1)	Contribution margin for current year	$400000
	Contribution margin for projected year	$ 440000
(2)	Fixed Costs	$ 456400

(b)

Correct answer icon

Your answer is correct.

Compute the break-even point in units and sales dollars for the current year.

Break-even point in units		114100	units
Break-even point in dollars		$ 1825600

eTextbook and Media

(c)

Your Answer
Correct Answer (Used)

The company has a target net income of $200,000. What is the required sales in dollars for the company to meet its target?

Sales dollars required for target net income

$2625600

(d)

New attempt is in progress. Some of the new entries may impact the last attempt grading.

Your answer is incorrect.

If the company meets its target net income number, by what percentage could its sales fall before it is operating at a loss? That is, what is its margin of safety ratio? (Round answer to 1 decimal place, e.g. 10.5.)

Margin of safety ratio

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