The question 1 point possibleStancil Dry Cleaners has determined the following about its costs: Total variable expenses are $42,000, total fixed expenses are $30,000, and the sales revenue needed to break even is $50,000. Determine the company's current)revenue and 2) operating income. (Hint First, find the contribution margin ratio; then prepare the contribution margin income statement)Use the contribution margin income statement and the shortcut contribution margin approaches to determine Stancif's current (1) sales revenue and (2) operating incomeBegin by computing the contribution margin ratio. (inter the result as a whole number)The contribution margin ratio laQuestion ViewerPrepare the contribution margin income statement at the calculated sales level.Stancil DrycleanersContribution Margin Income StatementSubmit t

Contribution Margin Ratio (CMR) CMR = Contribution / Sales x 100. Contribution = Sales - Variable…

Dry Cleanars has doeaminad the about the conte: Total vara 542,000 and 530,000 ad tobre850,000. Damdefea mue and 2) operating income Hint First, find the contribution margin ratic then prepare the contribution margin income tant) orome (1) Enter the result are the contribution margin income statement at the calculated sales level Stancil Drycleaners Contribution Margin Income Statement கள come

Dry Cleanars has doeaminad the about the conte: Total vara 542,000 and 530,000 ad tobre850,000. Damdefea mue and 2) operating income Hint First, find the contribution margin ratic then prepare the contribution margin income tant) orome (1) Enter the result are the contribution margin income statement at the calculated sales level Stancil Drycleaners Contribution Margin Income Statement கள come

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

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 29BEB: Sales Needed to Earn Target Income Chillmax Company plans to sell 3,500 pairs of shoes at 60 each in...

See similar textbooks

Similar questions

Sales Needed to Earn Target Income Chillmax Company plans to sell 3,500 pairs of shoes at 60 each in the coming year. Variable cost is 35% of the sales price; contribution margin is 65% of the sales price. Total fixed cost equals 78,000 (includes fixed factory overhead and fixed selling and administrative expense). Required: 1. Calculate the sales revenue that Chillmax must make to earn operating income of 81,900 by using the point in sales equation. 2. Check your answer by preparing a contribution margin income statement based on the sales dollars calculated in Requirement 1.
Describe the cost formula for a strictly variable cost such as electrical power cost of 1.15 per machine hour (i.e., every hour the machinery is run, electrical power cost goes up by 1.15).
A companys product sells for $150 and has variable costs of $60 associated with the product. What is its contribution margin per unit? A. $40 B. $60 C. $90 D. $150
Grand Canyon Manufacturing Inc. produces and sells a product with a price of 100 per unit. The following cost data have been prepared for its estimated upper and lower limits of activity: Overhead: Selling and administrative expenses: Required: 1. Classify each cost element as either variable, fixed, or semi-variable. (Hint: Recall that variable expenses must go up in direct proportion to changes in the volume of activity.) 2. Calculate the break-even point in units and dollars. (Hint: First use the high-low method illustrated in Chapter 4 to separate costs into their fixed and variable components.) 3. Prepare a break-even chart. 4. Prepare a contribution income statement, similar in format to the statement appearing on page 540, assuming sales of 5,000 units. 5. Recompute the break-even point in units, assuming that variable costs increase by 20% and fixed costs are reduced by 50,000.
A company sells mulch by the cubic yard. Grade A much sells for $150 per cubic yard and has variable costs of $65 per cubic yard. The company has fixed expenses of $15,000 per month. In August, the company sold 240 cubic yards of Grade A mulch. A. Calculate the contribution margin per unit for Grade A mulch. B. Calculate the contribution margin ratio of the Grade A mulch. C. Prepare a contribution margin income statement for the month of August.
Using High-Low to Calculate Predicted Total Variable Cost and Total Cost for a Time Period That Differs from the Data Period Refer to the information for Pizza Vesuvio on the previous page. Assume that this information was used to construct the following formula for monthly labor cost. TotalLaborCost=5,237+(7.40EmployeeHours) Required: Assume that 4,000 employee hours are budgeted for the coming year. Use the total labor cost formula to make the following calculations: 1. Calculate total variable labor cost for the year. 2. Calculate total fixed labor cost for the year. 3. Calculate total labor cost for the coming year. Use the following information for Brief Exercises 3-17 through 3-20: Pizza Vesuvio makes specialty pizzas. Data for the past 8 months were collected:
A companys product sells for $150 and has variable costs of $60 associated with the product. What is its contribution margin ratio? A.10% B.40% C. 60% D. 90%
Sales Revenue Approach, Variable Cost Ratio, Contribution Margin Ratio Arberg Companys controller prepared the following budgeted income statement for the coming year: Required: 1. What is Arbergs variable cost ratio? What is its contribution margin ratio? 2. Suppose Arbergs actual revenues are 30,000 more than budgeted. By how much will operating income increase? Give the answer without preparing a new income statement 3. How much sales revenue must Arberg earn to break even? Prepare a contribution margin income statement to verify the accuracy of your answer. 4. What is Arbergs expected margin of safety? 5. What is Arbergs margin of safety if sales revenue is 380,000?
A companys contribution margin per unit is $25. It the company increases its activity level from 200 units to 350 units, how much will its total contribution margin increase? A. $1,250 B. $3,750 C. $5.000 D. $8,750
West Island distributes a single product. The companys sales and expenses for the month of June are shown. Using the information presented, answer these questions: A. What is the break-even point in units sold and dollar sales? B. What is the total contribution margin at the break-even point? C. If West Island wants to earn a profit of $21,000, how many units would they have to sell? D. Prepare a contribution margin income statement that reflects sales necessary to achieve the target profit.