Parts a,band c using a table where necessary Benoit Manufacturing Company manufactures and sells parts for various musical gadgets. The followingin formation to a single part which is used in the production of a wind instrument. The business earnedOperating Income of $220,000 in 2019, when production was 3,000 units and the president of Darius is underpressure from shareholders to increase operating income in 2020 and is therefore considering theimplementation of strategies mainly geared at increasing revenues and or decreasing variable costs. Data forvariable cost per unit and total fixed costs were as follows:Variable expenses per unit:Direct Material$58Direct Labour$74Variable Manufacturing Overhead $48Fixed expenses:Fixed Manufacturing OverheadFixed Selling CostsFixed Administrative Costs$215,000$65,000$160,000Required:a)Compute the selling price per unit in 2019, using the equation method.b)Given the sales of 3,000 units and the selling price calculated in (a), prepare a contribution marginincome statement for the year ended December 31, 2019, detailing the components of total fixed costsand dearly showing contribution and net income.c)Calculate Benoit's break-even point in units and in sales dollars.d) Calculate the margin of safety in units and in sales dollars.e)The President of Benoit is under pressure from shareholders to increase operating income by 50% in2020. Management expects per unit data and total fixed costs to remain the same in 2020. Computethe number of units that would have to be sold in 2020 to reach the shareholders desired profit level. Isthis a realistic goal?Assume that as a result of reorganizing the production process, the management of BenoitManufacturing was able to reduce direct material cost per unit by $5 due to a change in the supplier ofthe raw material used in the production process. Variable manufacturing overhead per unit would alsodecrease by $3. The business is aiso considering paying additional annual commission of $36,400 toits sales team as part of the sales expansion effort, which should result in an increase in sales revenue.The head of the marketing department has indicated that the effort of the sales team should result in a5% increase in sales volume. What must the new seling price per unit be if the company wishes tomeet the shareholders desired profit level for 2020? is this a viable option?9) Briefly explain the impact of each of the following scenarios on the break-even point and the margin ofsafety:() Increase in sales volume(ii) Increase in total fixed costs(in) Increase in selling price per unit(iv) Decrease in variable costs per unit

SP per unit is calculated as total sales revenue divided by number of units sold.

Benoit Manufacturing Company manufactures and sells parts for various musical gadgets. The following information to a single part which is used in the production of a wind instrument. The business earned Operating Income of $220,000 in 2019, when production was 3,000 units and the president of Darius is under pressure from shareholders to increase operating income in 2020 and is therefore considering the implementation of strategies mainly geared at increasing revenues and or decreasing variable costs. Data for variable cost per unit and total fixed costs were as follows: Direct Material Direct Labour Variable Manufacturing Overhead $48 Fixed Manufacturing Overhead Fixed Seling Costs Fixed Administrative Costs Variable expenses per unit: $58 $74 Fixed expenses: $215,000 $65,000 $160,000 Required: a) Compute the seling price per unit in 2019, using the equation method. b) income statement for the year ended December 31, 2019, detailing the components of total fixed costs and dearly showing contribution and net income. c) Calculate Benoit's break-even point in units and in sales dolars.

Benoit Manufacturing Company manufactures and sells parts for various musical gadgets. The following information to a single part which is used in the production of a wind instrument. The business earned Operating Income of $220,000 in 2019, when production was 3,000 units and the president of Darius is under pressure from shareholders to increase operating income in 2020 and is therefore considering the implementation of strategies mainly geared at increasing revenues and or decreasing variable costs. Data for variable cost per unit and total fixed costs were as follows: Direct Material Direct Labour Variable Manufacturing Overhead $48 Fixed Manufacturing Overhead Fixed Seling Costs Fixed Administrative Costs Variable expenses per unit: $58 $74 Fixed expenses: $215,000 $65,000 $160,000 Required: a) Compute the seling price per unit in 2019, using the equation method. b) income statement for the year ended December 31, 2019, detailing the components of total fixed costs and dearly showing contribution and net income. c) Calculate Benoit's break-even point in units and in sales dolars.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 4EB: Roper Furniture manufactures office furniture and tracks cost data across their process. The...

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