Current Attempt in ProgressCrane Company had $290,600 of net income in 2021 when the unit selling price was $154, the unit variable costs were $94, and thefixed costs were $573,400. Management expects per unit data and total fixed costs to remain the same in 2022. The president ofCrane Company is under pressure from stockholders to increase net income by $57,600 in 2022.(a)Your answer is correct.Compute the number of units sold in 2021.Sales in 2021eTextbook and Media14400unitsAttempts: 1 of 3 used

To determine the units sold, we can use the net income formula:Net income = [(selling price -…

Answered: Current Attempt in Progress Crane…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 3PB

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Wildhorse Company had $273,300 of net income in 2019 when the selling price per unit was $155, the variable costs per unit were $90, and the fixed costs were $571,700. Management expects per unit data and total fixed costs to remain the same in 2020. The president of Wildhorse Company is under pressure from stockholders to increase net income by $39,000 in 2020. (A) Compute the number of units sold in 2019. Type your answer here units (B) Compute the number of units that would have to be sold in 2020 to reach the stockholders’ desired profit level. Type your answer here units (C) Assume that Wildhorse Company sells the same number of units in 2020 as it did in 2019. What would the selling price have to be in order to reach the stockholders’ desired profit level? New selling price $Type your answer here
SM Company had $150,000 of net income in 2020 when the selling price per unit was $150, the variable costs per unit were $90, and the fixed costs were $570,000. Management expects per unit data and total fixed costs to remain the same in 2021. The president of SM Company is under pressure from stockholders to increase net income by $60,000 in 2021. Instructions (a) Compute the number of units sold in 2020. (b) Compute the number of units that would have to be sold in 2021 to reach the stockholders’ desired profit level. (c) Assume that SM Company sells the same number of units in 2021 as it did in 2020. What would the selling price have to be in order to reach the stockholders’ desired profit level?
Rose Trading had RM210,000 of net profit in year 2021 when the selling price per unit was RM150, the variable costs per unit were RM90, and the fixed costs were RM570,000. Management expects per unit data and total fixed costs to remain the same in year 2022. The manager of Rose Trading is under pressure from investors to increase net profit by RM52,000 in year 2022.Required:(i) Compute the number of units sold in year 2021.(ii) Compute the number of units that would have to be sold in year 2022 to reach the shareholders’ desired profit level.
Rose Trading had RM210,000 of net profit in year 2021 when the selling price per unit was RM150, the variable costs per unit were RM90, and the fixed costs were RM570,000. Management expects per unit data and total fixed costs to remain the same in year 2022. The manager of Rose Trading is under pressure from investors to increase net profit by RM52,000 in year 2022.Required:(iii) Assume that Rose Trading sells the same number of units in year 2022 as it did in year 2021. What would the selling price have to be to reach the shareholders’ desired profit level?(iv) Assuming actual sales in year 2022 are 16,000 units with the new selling price as computed in (c), compute the margin of safety in (i) units and (ii) as a ratio. Briefly explain your findings. (Tips: Interpret about margin of safety)
Operating Income of $220,000 in 2019, when production was 3,000 units Variable expenses per unit: Direct Material $58Direct Labour $74Variable Manufacturing Overhead $48Fixed expenses: Fixed Manufacturing Overhead $215,000Fixed Selling Costs $65,000Fixed Administrative Costs $160,000 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 and say if this a realistic goal?
Operating Income of $220,000 in 2019, when production was 3,000 units Variable expenses per unit: Direct Material $58Direct Labour $74Variable Manufacturing Overhead $48Fixed expenses: Fixed Manufacturing Overhead $215,000Fixed Selling Costs $65,000Fixed Administrative Costs $160,000 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?
Solano Company has sales of $520,000, cost of goods sold of $380,000, other operating expenses of $51,000, average invested assets of $1,650,000, and a hurdle rate of 8 percent. Several possible changes that Solano could face in the upcoming year follow. Determine each scenario’s impact on Solano’s ROI and residual income. (Note: Treat each scenario independently.)a. Company sales and cost of goods sold increase by 40 percent. What is the residual income? Thanks
Flingen Inc. reveals the following information in its annual report for FY 2021 Income Statement Items Sales $11,000,000 Cost of goods sold $5,700,000 Pretax earnings $800,000 Selected Balance Sheet Items Merchandise inventory $100,000 Total assets $2,500,000 Management plans to cut cost of goods sold by 6% for the upcoming year while retaining the same sales. What will Flingen's profit leverage effect be for 2022? (Select the closest answer to your calculation of profit leverage). Group of answer choices $13.05 $10.40 $9.63 $11.15
In 2020, the Allen Company had consulting revenues of $1,000,000 while operating costs were $750,000. In 2021, Allen will be introducing a new service that will generate $150,000 in sales revenues and $60,000 in operating costs. Assuming no changes are expected for the other services, the differential revenue for 2021 will be: Multiple Choice $250,000. $60,000. $150,000. $90,000.
The financial manager of Orbit Limited provided the following forecasts for 2023:Sales are estimated at 8 000 units with a selling price of R1 800 each. The manufacturing costs include direct materials of R460 per unit, direct labour of R315 per unit, variable overheads of R170 per unit and fixed overheads of R880 000. Fixed selling and administration costs are estimated at R2 000 000 and the variableselling costs are estimated to be 7.5% of sales.The directors are contemplating diversification in 2024 by entering the passenger transport market. This couldbe achieved through the purchase of a fleet of midi buses that are expected to cost R9 500 000. An additional R500 000 will be spent on import duties. The cost of operating the buses each year is expected to be R4 100 000 and the annual revenues from transporting the passengers are estimated at R7 000 000. The buses are expected to have a total salvage value of R1 000 000 and the estimated useful life of the buses is fiveyears. The…
Jely Company manufactures a single product. In the prior year, the company had sales of P90,000, variable costs of P50,000, and fixed costs of P30,000 Sam expects its cost structure and sales price per unit to remain the same in the current year, however total sales are expected to increase by 20 percent. If the current year projections are realized, net income should exceed the prior year's net income by:
Naylor Company had $210,000 of net income in 2016 when the selling price perunit was $150, the variable costs per unit were $90, and the fi xed costs were $570,000.Management expects per unit data and total fi xed costs to remain the same in 2017. Thepresident of Naylor Company is under pressure from stockholders to increase net incomeby $52,000 in 2017.Instructions(a) Compute the number of units sold in 2016.(b) Compute the number of units that would have to be sold in 2017 to reach the stockholders’ desired profi t level.(c) Assume that Naylor Company sells the same number of units in 2017 as it did in 2016.What would the selling price have to be in order to reach the stockholders’ desiredprofi t level?

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