b) If the selling price increases by 10% calculate the increase in the net profit at the whole capacity assuming the taxes are 48% of the gross profit.
Q: Levi Company has revenues of P500,000, variable costs of P300,000, and pretax profit of P150,000. If…
A: Solution:- calculation of the new breakeven point (in pesos) as follows under:- The following…
Q: If marginal revenue is -0.006 „2 1,213 and the cost per unit is 0.9, how much do profits increase by…
A:
Q: Compute the pretax profit (income before income taxes) if the net income is $140,000 and the income…
A: Net income = $140,000 Income tax rate = 0.30 or 30% Pretax profit = ? Pretax profit is the profit…
Q: The sales in units required by Photo Finish to make an after-tax profit (TA) of $20,000, given an…
A: Introduction:- Cost-volume-profit (CVP) analysis is an important and systematic method that provides…
Q: PE 2. Baler Company has annual sales of P2.5M with variable expenses of 60 percent of sales and…
A: Contribution margin ratio = 100 - Variable costs % Annual sales required for target profit = Annual…
Q: Thomson Trucking has $16 billion in assets, and its tax rate is 40%.Its basic earning power (BEP)…
A: The time's interest earned ratio is the ratio which shows the ability of the company to meet the…
Q: Ginger Corp. sells a product for P5 per unit. The fixed expenses are P210,000 and the unit variable…
A: The target sales can be calculated according to the concept of CVP analysis.
Q: 1. How much will be contributed to profit before taxes by the 1,021st unit sold?
A: Breakeven units means sales revenue at which business is not earning any profit or loss and it is…
Q: If the sales this year amounted to P500,000, sales this year at last year's prices is P460,000, the…
A: Gross profit seems to be a firm's earnings benefit after the cost or expense required for the…
Q: Suppose you sell a fixed asset for $126,000 when it's book value is $157,000. If your company's…
A: The computation of after tax cash flow is as follows:Hence, the after tax cash flow is $136850.
Q: |The cost per unit of producing a product is 60 + 0.2x dollars, where x represents the number of…
A: Revenue: It is the income earned by a business in the course of its regular business activities.…
Q: Suppose that there is a customer expected to annually generate $1,500 of gross contribution. With…
A: The present value is the value of the sum received at time 0. It is the current value of the sum…
Q: If the sales this year amounted to P500,000, sales this year at last year's prices is P460,000. The…
A: In this problem we have to find profit in both conditions previous years prices and current year…
Q: A company sells its product at P18 per unit. Variable costs are P12 per unit and fixed costs are…
A: Contribution margin = sales - variable costs = 18-12 = P6 per unit Contribution margin ratio =…
Q: The peso sales necessary to achieve a target income of P21,000 after taxes of 30% is P450,000. The…
A: Contribution ratio refers to the ratio of contribution margin and sales where contribution margin…
Q: 4. What is Reagan's current contribution margin and operating income? Current contribution margin…
A: Degree of operating leverage = Contribution margin / operating income If sales increases by…
Q: Suppose you sell a fixed asset for $110,000 when its book value is $130,000. If your company's…
A: Loss on sale = Book value - Sale value of asset =(130000-110000) =$20000
Q: Suppose you sell a fixed asset for $129,000 when its book value is $149,000. If your company’s…
A: Calculation of After-tax Cash Flow:The after-tax cash flow is $137,000.Excel Spreadsheet:
Q: Assuming that NUBD increased sales of Product X by 25 percent, what should the profit from Product X…
A: Solution: Contribution margin ratio = Contribution margin / sales = (P300,000 - P240,000) /…
Q: . If net sales amounted to P200,000, net income before tax is P80,000 and the income tax rate is…
A: Profit margin ratio is the profitability ratio which shows ratio of net income with net sales in the…
Q: The following information relates to fin ancial projections of NUBDCompany: Projected sales…
A: Degree of operating Leverage: Degree of Operating Measure that in response to change in sales how…
Q: Bluejeans Company has an after-tax profit of P140,000. Bluejeans hás a return on sa 20% and the tax…
A: Contribution margin- Contribution Margin is defined as selling price minus variable cost, and it…
Q: If a company's variable costs are 70% of sales, which formula represents the computation of peso…
A: Solution: If variable cost is 70% of sales and profit is 10% for sale, it means: Fixed costs = 20%…
Q: The sales and profit for two years are as below: Sales Profit 2020 60000 17000 2021 90000 32000…
A: The break-even point is the point at which the total sales of the company are equal to the total…
Q: Gorilla Movers has sales of S645,560, cost of gods sold of SsA25,890, depreciation of $32,450, and…
A: The times interest earned ratio is calculated as ratio of earnings before interest and taxes and the…
Q: A plant operating at 100% capacity (1000 kg product per year) has an annual net profit of $40,000…
A: Break even point(BEP)= Fixed cost/Contribution per unit Variable cost ratio + Contribution Ratio=…
Q: 7. If net sales amounted to P200,000, net income before tax is P80,000 and the income tax rate is…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: What level of sales would generate a net income of $4.2m for the following year, knowing that…
A: Net sales revenue Net sales equals total revenue minus appropriate sales returns, allowances, and…
Q: How many units would NUBD Company need to sell to earn a profit after taxes of P15,000?
A: Net profit means the difference between the income and expenses.Net profit after taxes means the…
Q: With a tax rate of 25%, fixed costs of P34,000, and a contribution ratio of 45%, how much revenue is…
A: In order to compute the revenue that is required to achieve a desired after-tax profit of P36,000,…
Q: If forecasted sales of #150,000 ,Total cost of sales $123,000 includes Variable cost of 100,500 and…
A: Variable cost means the cost which vary with the level of output and fixed cost means the cost which…
Q: Your company forecasts that next year's sales will be $59.00 million, Cost of Goods Sold (COGS) will…
A: Accounts payables are calculated by multiplying days payables outstanding with the cost of goods…
Q: Suppose you sell a fixed asset for $112,000 when its book value is $112,000. If your company's…
A: After-tax cash flow of the sale is the cash flow after paying the tax on the gain on sale. The fixed…
Q: sales are estimated at 125,000 units, and it is required to achieve income after tax of 75,000…
A: Total Estimated variable cost = Total Estimated Sales - Total Estimated Fixed Cost - Total…
Q: Assuming that the amount of fixed costs is expected to remain at P190,000 for 2021. and the sales…
A: An income statement is concerned with operations of a business expressed in expense and income and…
Q: Below is the income statement for NUBD Co. for 2020: Sales "Variable costs Contribution margin Fixed…
A: An income statement is concerned with operations of a business expressed in expense and income and…
Q: If the sales this year amounted to P500,000, sales this year at last year's prices is P460,000, the…
A: Sales revenue is the function of sales price and quantity sold. Therefore, any variation in sales…
Q: If the vertical percentage of operating profit is 60% and vertical percentage of gross sales profit…
A: Operating expenses: These expenses are incurred in the course of regular business operations. These…
Q: How many units would NUBD Company need to sell to earn a profit after taxes of P15,000? * The…
A: Solution: Contribution margin per unit = Selling price - Variable costs = P7 - P2 = P5 per unit…
Q: If the net profit of the firm is OMR 280000 and the capital employed is OMR 1400000, then the return…
A: Given Net profit of the firm = OMR 280000 Capital Employed = OMR 1400000 Return on capital employed…
Q: 4. If the company wants a 20% before-tax return on sales, what level of sales, in pesos, does it…
A: Contribution margin or gross profit refers to the profit earns by the company for selling goods and…
Q: The annual FC amounted to P798,000. At present, the contribution margin ratio is 42%. Determine the…
A: Sales revenue: It implies to the amount that is generated by the business from selling its goods or…
Q: The demand for a product during the next ten years will be such that revenues will be $100,000 the…
A:
Q: 6. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what…
A: Here sales volume = 1,000 units( Given) Hence Current sale price per unit = Total sales/ units =…
Q: Suppose you sell a fixed asset for $115,000 when it's book value is $135,000. If your company's…
A: The after tax cash flow is calculated as cash flow from sale proceeds minus tax on gain on sale
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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- Mortech makes digital cameras for drones. Their basic digital camera uses $80 in variable costs and requires $1,500 per month in fixed costs. Mortech sells 200 cameras per month. If they process the camera further to enhance its functionality, it will require an additional $45 per unit of variable costs, plus an increase in fixed costs of $1,000 per month. The current price of the camera is $200. The marketing manager is positive that they can sell more and charge a higher price for the improved version. At what price level would the upgraded camera begin to improve operational earnings?4. Nestle Ltd. It produces its premium plant food in 50 Kg bags. Demand is 100,000 Kgs. per week and the plant operates 52 weeks each year. Nestle can produce 250,000 Kgs. per week. The setup cost is OMR 200 and the annual holding cost rate is OMR 0.40 per bag. What will the optimal duration of the downtime in years ? a.None is correct b. 0.076 c. 0.069 d. 0.721 e. 0.065 O f. 0.502You want to establish your own business and are thinking about releasing a new Customers will pay P150 for it, according to market research, and your sales team believes they can sell at least 1,000 units every month. The equipment you'll need to make the product will require a monthly fixed cost of P400,000 and lease of facility at P500,000.Costs of producing the product are direct labor P20, direct mate1ials Pl5, shipping P5 and sales commission PlO. What is the breakeven point? Will this be a profitable venture? Justify you answer
- company X produce and sell 80000 calculators yearly. the capacity for company to produce 100000 calculators . the next data available the variable cost per calculator: manufacturing cost 22 selling and administrative 10 the fixed cost: manufacturing cost 256000 selling and administrative 112000 if the company accepted to special order to sell 10000 calculator at selling price 50 per calculator. whats the effect of the company income?Vista Company manufactures electronic equipment. It currently purchases the special switches used in each of its products from an outside supplier. The supplier charges Vista $6.20 per switch. Vista’s CEO is considering purchasing either machine A or machine B so the company can manufacture its own switches. The projected data are as follows: Machine A Machine B Annual fixed costs $ 756,000 $ 1,036,150 Variable cost per switch 2.00 0.90 Required: 1. For each machine, what is the minimum number of switches that Vista must make annually for total costs to equal outside purchase cost? 2. What volume level would produce the same total costs regardless of the machine purchased? 3. What is the most profitable alternative for producing 255,000 switches per year and what is the total cost of that alternative?1. A recently retired professor, Melinda Marketing, plans to establish the Hot-Air FanCompany and manufacture circulating fans. She estimates the fixed cost of operations tobe $357,500 annually. The variable cost of producing the fans is forecasted to be $85 perunit.a. How many fans must be sold to break even if the fans are priced at $150?b. If Hot-Air sells 6,000 fans, what will be the EBIT?c. If Hot-Air sells 6,000 fans and has interest expense of $8,125, what is Hot-Air’stimes-interest-earned? Hot-Air does not have any nonoperating expenses.d. If the fans are priced at $150, what is Hot-Air’s breakeven sales? 2. Vapor Lock Motors’ EBIT is $7,000,000, the company’s interest expense is $2,000,000, and its tax rate is 40 percent. Vapor Lock’s beta is 1.5. a. What is Vapor Lock’s DFL? b. If Vapor Lock were able to grow its EBIT by 50%, what would be the percentage increase in net income? c. If Vapor Lock were able to grow its EBIT by 50%, what would be the resulting net income? 3. A…
- (i) Electronics Ltd manufactures air conditioners. It purchases 200,000 units of a particular type of compressor part, CU30, each year at a cost of $64 per unit. Annual carrying cost (for insurance, material handling, breakage etc) per unit is 5% of the unit purchase price. Currently Electronics Ltd places 50 orders for 4,000 units each year and ordering costs per purchase order are $18. d) Calculate the EOQ.e) What is the minimum ordering cost?f) What is the minimum storage cost?Please answer questions 4a-4d only. Neptune Company has developed a small inflatable toy that it is anxious to introduce to its customers. The company’s Marketing Department estimates that demand for the new toy will range between 20,000 units and 35,000 units per month. The new toy will sell for $9.00 per unit. Enough capacity exists in the company’s plant to produce 25,000 units of the toy each month. Variable expenses to manufacture and sell one unit would be $5.00 , and incremental fixed expenses associated with the toy would total $30,000 per month. Neptune has also identified an outside supplier who could produce the toy for a price of $4.00 per unit plus a fixed fee of $71,000 per month for any production volume up to 25,000 units. For a production volume between 25,001 and 55,000 units the fixed fee would increase to a total of $142,000 per month. Required: 1. Calculate the break-even point in unit sales assuming that Neptune does not hire the outside supplier. 2. How much…Stone Manufacturing sells a marble slab for $1.500 Fixed costs are 130,000, while the variable costs are $500 per wish. The company currently plans to sell 100 sise this month. What is the margin of safety assuming 75 slabs are actually sold? (Round a unit calculations up to the rarest whole nutter) A $30,000 B. $102,000 C. $64,500 D. $47,000 Only typing answer Please explain step by step
- Relling Corporation manufactures a drink bottle, model CL24. During 2017, Relling produced 210,000 bottles at a total cost of $808,500. Kraff Corporation has offered to supply as many bottles as Relling wants at a cost of $3.75 per bottle. Relling anticipates needing 225,000 bottles each year for the next few years. Q. Can Relling use the answer in requirement 1a to determine the cost of manufacturing 225,000 drink bottles? Explain.1. Production has indicated that they can produce widgets at a cost of P4.00 each if they lease new equipment at a cost of P10,000. Marketing has estimated the number of units they can sell at a number of prices (Php4000) Which price/volume option will allow the firm to avoid losing money on this project? (Please show and explain solution)Anderson Inc. uses packing machines to prepare their product for shipping. One machine costs $136,000 and lasts about 5 years before it needs to be replaced. The operating cost per machine is $6,500 a year. Ignoring taxes, what is the equivalent annual cost of one packing machine if the required rate of return is 11%? Multiple Choice $49,904 $51,036 $44,298 $43,298 $50,776