Please answer the 4 questions. These are just easy questions. Skip if you would only answer the three. Thank you Determine the break-even point in dollars for two divisions.E6.36 (LO 1, 2, 5) Mega Electronix sells television sets and Blu-ray DVD players. The business is divided into two divisions along product lines. A variable cost income statement for arecent quarter's activity is presented below:SalesVariable costsContribution marginFixed costsOperating incomeTVDivision$800,000560,000$240,000Instructionsa. Determine the percentage of sales and the contribution margin for each division.b. Calculate the company's weighted-average contribution margin ratio.c. Calculate the company's break-even point in dollars.d. Determine the sales level in dollars for each division at the break-even point.Blu-ray DVDPlayer Division$200,000160,000$ 40,000Total$1,000,000720,000280,000140,000$ 140,000

There are two type of costs being incurred in business. One is variable costs which changes along…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Compare the following two companies: Company A is a retail merchandise firm with current sales of $4,000,000 and a 45% contribution margin. Company A's fixed costs are $600,000. Company B is a service firm with current service revenue of $2,800,000 and a 15% contribution margin. Company B’s fixed costs are $375,000. The following names are to be considered when completing this problem: Operating Income Variable Costs Sales Fixed Costs per Unit Selling Price per Unit Variable Cost per Unit Contribution Margin Fixed Costs Operating Loss 1. Based on the information given, prepare a complete contribution margin income statement for Company A: Company AContribution Margin Income StatementProjected 2. Based on the information given, prepare a complete contribution margin income statement for Company B: Company BContribution Margin Income StatementProjected 3.Compute the degree of operating leverage for…
Driver Company manufactures two products. Data concern-ing these products are shown below: Direct TotalLabor ManufacturingHours OverheadHighest observed level . . . . . . . 6,000 $17,000Lowest observed level . . . . . . . . 4,000 14,000 Product A Product BTotal monthly demand (in units). . 1,000 200Sales price per unit . . . . . . . . . $400 $500Contribution margin ratio. . . . . 30% 40%Relative sales mix . . . . . . . . . . . 80% 20%If fixed costs are equal to $320,000, what amount of totalsales revenue is needed to break even?a. $914,286. c. $320,000.b. $457,143. d. $1,000,000.
Rings Company has three product lines, A, B, and C. The following financial information is available: Item Product Line A Product Line B Product Line C Sales $ 66,000 $ 135,000 $ 30,000 Variable costs $ 39,600 $ 72,000 $ 18,750 Contribution margin $ 26,400 $ 63,000 $ 11,250 Fixed costs: Avoidable $ 6,100 $ 18,000 $ 8,400 Unavoidable $ 4,800 $ 13,500 $ 3,800 Pre-tax operating income $ 15,500 $ 31,500 $ (950) If Product Line C is discontinued and the manufacturing space formerly devoted to this line is rented for $6,000 per year, pre-tax operating income for the company will likely: Multiple Choice Be unchanged—the two effects cancel each other out. Increase by $1,950. Increase by $3,150. Increase by $5,850. Increase by some other amount.
Shown here is an income statement in the traditional format for a firm with a sales volume of 7,500 units. Cost formulas also are shown: Revenues $ 34,400 Cost of goods sold ($5,500 + $2.10/unit) 21,250 Gross profit $ 13,150 Operating expenses: Selling ($1,160 + $0.11/unit) 1,985 Administration ($3,900 + $0.20/unit) 5,400 Operating income $ 5,765 Required: Prepare an income statement in the contribution margin format. Calculate the contribution margin per unit and the contribution margin ratio. Calculate the firm's operating income (or loss) if the volume changed from 7,500 units to (a. 11,250 units and b. 3,750 units.) Refer to your answer to part a for total revenues of $34,400. Calculate the firm’s operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues (a. Increase by $14,000 and b. Decrease by $3,000.)
Matamad Inc. Provides you with the following data on its operation for analysis:Unit selling priceP40Variable costs and expenses per unit.P30Fixed cost and expenses per annum.P48,000REQUIRED:a. Contribution margin per unitb. Contribution margin percentagec. BEP sales volume (units)d. BEP peso salese. Peso sales with desired income of P9,000f. Peso sales with desired income P13,000 after 32% income tax
Prepare a contribution margin format income statement; answer what-ifquestions Shown here is an income statement in the traditional format for a firm with a sales volume of 20,000 units. Cost formulas also are shown:Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $200,000Cost of goods sold ($36,000 1 $5.20/unit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140,000Gross profi t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 60,000Operating expenses:Selling ($9,200 1 $0.30/unit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,200Administration ($18,800 1 $0.50/unit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,800Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 16,000Required:a. Prepare an income statement in the…
Hello, I have a question. Shown here is an income statement in the traditional format for a firm with a sales volume of 15,500 units. Revenues $170,500 Cost of goods sold ($10,000 + $2.75 per unit) 52,625 Gross Profit $117,875 Operating expenses Selling ($2,450 + $1.15 per unit) 20,275 Administration ($5,000 + $0.45 per unit) 11,975 Operating income $85,625 Part A was done. (Prepare income statement in contribution margin format). B. Calculate the contribution margin per unit and the contribution margin ratio. (I got $6.65 and 60.45% for ratio). C1. Calculate the firm's operating income if the volume changed from 15,500 units to 20,500 units. (I got $118,875) C2. Calculate the firm's operating income if volume changed from 15,500 units to 7,500 units. (I got $32,425) My question is regarding the following. Refer to your answer when total revenues were $170,500. D1. Calculate the firm's operating income (or loss) if unit selling…
Jenna Corporation sells a single product. Management has provided the following data for two levels of monthly sales volume. The company sells the product for $172.50 per unit. Sales Volume in Units 4,000 5,000 Cost of Sales (COS) $307,600 $384,500 Selling, General & Administrative Costs (SG&A) $321,200 $337,000 Selling Price Per Unit $173 Total costs for these cost categories and may include both Fixed and Variable costs. HINT: See high-low analysis. 1. Calculate the total contribution margin when 4,300 units are sold. 2. What is the breakeven point in Sales dollars if Advertising (a fixed SG&A cost) is increased by $40,000? Please show calculations.
Lamp Company has the following cost-volume-profit (CVP) data: Breakeven point, in units 3,000 Selling price per unit $ 600 Total fixed costs $ 124,000 What is the variable cost per unit (rounded to two decimal places)?
Shown here is an income statement in the traditional format for a firm with a sales volume of 8,000 units. Cost formulas also are shown: Revenues $ 32,000 Cost of goods sold ($6,000 + $2.10/unit) 22,800 Gross profit $ 9,200 Operating expenses: Selling ($1,200 + $0.10/unit) 2,000 Administration ($4,000 + $0.20/unit) 5,600 Operating income $ 1,600 Required: Prepare an income statement in the contribution margin format. Calculate the contribution margin per unit and the contribution margin ratio. Calculate the firm’s operating income (or loss) if the volume changed from 8,000 units to 12,000 units. 4,000 units. Refer to your answer to part a for total revenues of $32,000.Calculate the firm’s operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues Increase $12,000. Decrease $7,000.
Prepare a contribution margin format income statement; answer what-ifquestions Shown here is an income statement in the traditional format for a firm with a sales volume of 15,000 units:Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $105,000Cost of goods sold ($8,000 1 $3.60/unit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62,000Gross profi t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 43,000Operating expenses:Selling ($1,500 1 $0.80/unit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,500Administration ($4,000 1 $0.50/unit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,500Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 18,000Required:a. Prepare an income statement in the contribution margin format.b. Calculate the…
what is the Revenue, cost and profit functions for the problem below? Orange Company buys Product A for P15 per units and sells them for P25 per unit. There areno other variable costs. Fixed cost is P6,000. Use the breakeven formula to determine thefollowing:a. Revenue, cost and profit functions.

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