Exercise 6-12 (Algo) Multiproduct Break-Even Analysis [LO6-9]Olongapo Sports Corporation distributes two premium golf balls-Flight Dynamic and Sure Shot. Monthly sales and the contributionmargin ratios for the two products follow:ProductFlightDynamicSalesCM ratio$ 740,000Sure Shot$260,000Total$1,000,00063%77%?Fixed expenses total $587,000 per month.Required:1. Prepare a contribution format income statement for the company as a whole.2. What is the company's break-even point in dollar sales based on the current sales mix?3. If sales increase by $59,000 a month, by how much would you expect the monthly net operating income to increase?Complete this question by entering your answers in the tabs below.Required 1 Required 2Required 3Prepare a contribution format income statement for the company as a whole. (Round your percentage answers to 2 decimal places(i.e. 0.1234 should be entered as 12.34).)Flight DynamicmountSure Shot%Amount%Total CompanyAmount%< Prev6 of 9.Next >

Contribution margin is a sales less variable cost of the company. It is calculated in order to…

Answered: Exercise 6-12 (Algo) Multiproduct…

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter11: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 11.2.1P: Break-even sales under present and proposed conditions Kearney Company, operating at full capacity,...

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3-16 Jack’s Jax has total fixed costs of $25,000. If the company’s contribution margin is 60%, the incometax rate is 25% and the selling price of a box of Jax is $20, how many boxes of Jax would the company needto sell to produce a net income of $15,000?a. 5,625 b. 4,445c. 3,750 d. 3,3333-17 During the current year, XYZ Company increased its variable SG&A expenses while keeping fixedSG&A expenses the same. As a result, XYZ’s:a. Contribution margin and gross margin will be lower.b. Contribution margin will be higher, while its gross margin will remain the same.c. Operating income will be the same under both the financial accounting income statement and contributionincome statement.d. Inventory amounts booked under the financial accounting income statement will be lower than underthe contribution income statement.3-18 Under the contribution income statement, a company’s contribution margin will be:a. Higher if fixed SG&A costs decrease.b. Higher if variable SG&A costs…
3-25 CVP exercises. The Doral Company manufactures and sells pens. Currently, 5,000,000 units are soldper year at $0.50 per unit. Fixed costs are $900,000 per year. Variable costs are $0.30 per unit.Consider each case separately:1. a. What is the current annual operating income?b. What is the current breakeven point in revenues?Compute the new operating income for each of the following changes:2. A $0.04 per unit increase in variable costs3. A 10% increase in fixed costs and a 10% increase in units sold4. A 20% decrease in fixed costs, a 20% decrease in selling price, a 10% decrease in variable cost perunit, and a 40% increase in units soldCompute the new breakeven point in units for each of the following changes:5. A 10% increase in fixed costs6. A 10% increase in selling price and a $20,000 increase in fixed costs3-26 CVP analysis, income taxes. Westover Motors is a small car dealership. On average, it sells a carfor $32,000, which it purchases from the manufacturer for $28,000. Each…
1. Ethan Corporation budgets fixed expenses of $250,000: variable expenses of $180,000 and a sale of 15,000 units for $28 each. If the Company could increase its selling price by $2 each and decrease its variable expenses to $150,000, the number of units to be sold in order to breakeven would be * a. 12,500 units b. 13,889 units c. 12,863 units d. 14,463 units 2, C2 Company had sales of Php576,000 and variable costs of Php324,000. Fixed costs amount to Php96,000 from an expected production of 7,200 units. If the company expects to increase its sales by 960 units by incurring an additional Php24,000 for advertising expense, what will happen to profit? Group of answer choices: a. Increase of Php33,600 b. Decrease of Php33,600 c. Decrease of Php9,600 d. Increase of Php9,600
subparts A- C have been solved, Need help solving D & E Healthy Foods Inc. sells 50-pound bags of grapes to the military for $10 a bag. The fixed costs of this operation are $102,000, while the variable costs of grapes are $0.10 per pound. a. What is the break-even point in bags? 20,400.00 b. Calculate the profit or loss (EBIT) on 11,000 bags is (47,000) and on 30,000 bags 48,000c. What is the degree of operating leverage at 25,000 bags is 5.43 and at 30,000 bags is 3.12 d. If Healthy Foods has an annual interest expense of $12,000, calculate the degree of financial leverage at both 25,000 and 30,000 bags. (Round your answers to 2 decimal places.) e. What is the degree of combined leverage at both 25,000 and 30,000 bags? (Round your answers to 2 decimal places.)
CH7-Q50: Hi I have asked this question before, but i haven't received explanation on requirement # 3. Also, last question was not answered. Please answer #6 (last question) and fully explain # 3. thanks! Jellico Inc.'s projected operating income (based on sales of 450,000 units) for the coming year is as follows: Total Sales $ 12,150,000 Total variable cost 7,533,000 Contribution margin $ 4,617,000 Total fixed cost 2,875,878 Operating income $ 1,741,122 Required: 1(a). Compute variable cost per unit. Enter your answer to the nearest cent.$per unit 1(b). Compute contribution margin per unit. Enter your answer to the nearest cent.$per unit 1(c). Compute contribution margin ratio. % 1(d). Compute break-even point in units. units 1(e). Compute break-even point in sales dollars.$ 2. How many units must be sold to earn operating income of $376,542? units 3. Compute the additional operating income that Jellico would earn if sales were $50,000 more than expected.$ 4. For…
E21-24. Product Pricing: Two Products Assume Verbatim, a subsidiary of CMC Magnetics, manufactures two products, CDs and DVDs, both on the same assembly lines and packaged 30 disks per pack. The predicted sales are 150,000 packs of CDs and 500,000 packs of DVDs. The predicted costs for the year are as follows: Variable Costs Fixed Costs Materials ............................................ $4,000,000 $1,560,000 Other............................................... 2,000,000 2,052,500 CDs use 25% of the materials costs and 10% of the other costs. DVDs use 75% of the materials costs and 90% of the other costs. The management of Verbatim desires an annual profit of $450,000. Required a. What price should Verbatim charge for each disk pack if management believes the DVDs sell for twice the price of the CDs? The answer is CD:$8.75 per CD pack DVD=$17.5 per DVD pack. PLEASE SHOW ME STEP BY STEP CALCULATION HOW DO WE GET THIS ANSWER b. What is the total profit per product using the…
Exercise 6-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume [LO6-4] Skip to question [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Per Unit Percent of Sales Selling price $ 125 100 % Variable expenses 80 64 Contribution margin $ 45 36 % Fixed expenses are $85,000 per month and the company is selling 2,700 units per month. rev: 06_04_2020_QC_CS-205709, 06_18_2020_QC_CS-216765, 07_14_2020_QC_CS-216765 Exercise 6-5 Part 1 Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,000 and monthly sales increase by $20,000? 1-b. Should the advertising budget be increased?
Multiproduct Break-Even Analysis Olongapo Sports Corporation distributes two premium golf balls—Flight Dynamic and Sure Shot. Monthly sales and the contribution margin ratios for the two products follow: Fixed expenses total $183,750 per month. Required: 1. Prepare a contribution format income statement for the company as a whole. Carry computations to one decimal place. 2. What is the company’s break-even point in dollar sales based on the current sales mix? 3. If sales increase by $100,000 a month, by how much would you expect the monthly net operating income to increase? What are your assumptions?
3-47 CVP analysis, income taxes, sensitivity. (CMA, adapted) Thompson Engine Company manufacturesand sells diesel engines for use in small farming equipment. For its 2017 budget, Thompson Engine Companyestimates the following:Selling price $ 7,000Variable cost per engine $ 2,000Annual fixed costs $5,560,000Net income $ 900,000Income tax rate 40%The first-quarter income statement, as of March 31, reported that sales were not meeting expectations.During the first quarter, only 300 units had been sold at the current price of $7,000. The income statementshowed that variable and fixed costs were as planned, which meant that the 2017 annual net income projectionwould not be met unless management took action. A management committee was formed and presentedthe following mutually exclusive alternatives to the president:a. Reduce the selling price by 15%. The sales organization forecasts that at this significantly reducedprice, 1,400 units can be sold during the remainder of the year. Total…
CVP – Basic Analysis Raveen Products sells camping equipment. One of the company’s products, a camp lantern, sells for $90 per unit. Variable expenses are $63 per lantern, and fixed expenses associated with the lantern total $135,000 per month. Required: At present, the company is selling 8,000 lanterns per month. The sales manager is convinced that a 10% reduction in the selling price will result in a 25% increase in the number of lanterns sold each month. Prepare two contribution format income statements, one under present operating conditions, and one as operations would appear after the proposed changes. Show both total and per unit data on your statements. Refer to the data in (1) above. How many lanterns would have to be sold at the new selling price to yield a minimum net operating income of $72,000 per month?
Exercise 6-10 Multiproduct Break-Even Analysis [LO6-9] Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below: Claimjumper Makeover Total Sales $ 30,000 $ 70,000 $ 100,000 Variable expenses 20,000 50,000 70,000 Contribution margin $ 10,000 $ 20,000 30,000 Fixed expenses 24,000 Net operating income $ 6,000 Required: 1. What is the overall contribution margin (CM) ratio for the company? 2. What is the company's overall break-even point in dollar sales? 3. Prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of sales for the two products.
Break-even sales under present and proposed conditions Kearney Company, operating at full capacity, sold 400,000 units at a price of $246.60 per unit during 20Y5. Its income statement for 20Y5 is as follows: The division of costs between fixed and variable is as follows: Management is considering a plant expansion program that will permit an increase of $8,631,000 (35.000 units at $246.60) in yearly sales. The expansion will increase fixed costs by $3,600,000 but will not affect the relationship between sales and variable costs. Instructions Determine for 20Y5 the total fixed costs and the total variable costs.

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