Current Attempt in Progress Sheffield/Davis Designs sells customized mobile phone covers. The company's controller prepared the following income statement for the upcoming monthly management meeting. Sales revenue $90,000 Cost of goods sold $24,600 Variable selling expenses 3,350 Variable general and administrative expenses 17,950 Total variable expenses 45,900 44,100 Contribution margin 6,000 Fixed selling expenses 18,000 Fixed neral and administrative expenses 24,000 Total fixed expenses $20,100 Operating income

Current Attempt in Progress Sheffield/Davis Designs sells customized mobile phone covers. The company's controller prepared the following income statement for the upcoming monthly management meeting. Sales revenue $90,000 Cost of goods sold $24,600 Variable selling expenses 3,350 Variable general and administrative expenses 17,950 Total variable expenses 45,900 44,100 Contribution margin 6,000 Fixed selling expenses 18,000 Fixed neral and administrative expenses 24,000 Total fixed expenses $20,100 Operating income

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

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

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

Chapter2: Basic Managerial Accounting Concepts

Section: Chapter Questions

Problem 26BEA

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Computing breakeven sales and sales needed to earn a target profit; graphing CVP relationships; performing sensitivity analysis National Investor Group is opening an office in Portland, Oregon. Fixed monthly costs are office rent ($8,100), depreciation on office furniture ($1,700), utilities ($2,000), special telephone lines ($1,500), a connection with an online brokerage service ($2,500), and the salary of a financial planner ($5,200). Variable costs include payments to the financial planner (9% of revenue), advertising (11% of revenue), supplies and postage (4% of revenue), and usage fees for the telephone lines and computerized brokerage service (6% of revenue). Requirements Use the contribution margin ratio approach to compute Nationals breakeven revenue in dollars. If the average trade leads to $1,000 in revenue for National, how many trades must be made to break even? Use the equation approach to compute the dollar revenues needed to earn a monthly target profit of $12,600.…
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