Kelchner Corporation has provided the following contribution format income statement. Assume that the fll information is within the relevant range. Sales (3,000 units) Variable expenses $ 180,000 108.000 72,000 62,400 9,600 Contribution margin Fixed expenses Net operating income 15. What is the contribution margin ratio for Kelchner Corporation? %24

Kelchner Corporation has provided the following contribution format income statement. Assume that the fll information is within the relevant range. Sales (3,000 units) Variable expenses $ 180,000 108.000 72,000 62,400 9,600 Contribution margin Fixed expenses Net operating income 15. What is the contribution margin ratio for Kelchner Corporation? %24

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

Chapter8: Tactical Decision-making And Relevant Analysis

Section: Chapter Questions

Problem 11MCQ: Garrett Company provided the following information: Common fixed cost totaled 46,000. Garrett...

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Garrett Company provided the following information: Common fixed cost totaled 46,000. Garrett allocates common fixed cost to Product 1 and Product 2 on the basis of sales. If Product 2 is dropped, which of the following is true? a. Sales will increase by 300,000. b. Overall operating income will increase by 2,600. c. Overall operating income will decrease by 25,000. d. Overall operating income will not change. e. Common fixed cost will decrease by 27,600.
Contribution margin, break-even sales, cost-volume-profit chart, margin of safety, and operating leverage Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows: It is expected that 12,000 units will be sold at a price of 240 a unit. Maximum sales within the relevant range are 18,000 units. Instructions 1. Prepare an estimated income statement for 20Y7. 2. What is the expected contribution margin ratio? 3. Determine the break-even sales in units and dollars. 4. Construct a cost-volume-profit chart indicating the break-even sales. 5. What is the expected margin of safety in dollars and as a percentage of sales? (Round to one decimal place.) 6. Determine the operating leverage.
The following data were adapted from a recent income statement of Caterpillar Inc. (CAT) for the year ended December 31: Assume that 8,500 million of cost of goods sold and 4,000 million of selling, administrative, and other expenses were fixed costs. Inventories at the beginning and end of the year were as follows: Also, assume that 30% of the beginning and ending inventories were fixed costs. a. Prepare an income statement according to the variable costing concept for Caterpillar Inc. Round numbers to nearest million. b. Explain the difference between the amount of operating income reported under the absorption costing and variable costing concepts. Round numbers to nearest million.
Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales$ 55,000Variable expenses33,000Contribution margin22,000Fixed expenses14,960Net operating income$ 7,04015. Assume that the amounts of the company’s total variable expenses and total fixed expenses were reversed. In other words, assume that the total variable expenses are $14,960 and the total fixed expenses are $33,000. Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in unit sales? (Round your intermediate calculations and final answer to 2 decimal places.)
Sjostrom Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. Sales (7,000 units) $ 280,000 Variable expenses 182,000 Contribution margin 98,000 Fixed expenses 84,000 Net operating income $ 14,000 If the variable cost per unit increases by $10, spending on advertising increases by $1,500, and unit sales increase by 15,800 units, the net operating income would be closest to: a/ 12,500 b/ 114,100 c/ 91,200 d/ 5,700
Skywalker Corporation reported the following on their contribution format income statement: Sales (12,000 units) $175,000 Less: Variable expenses 100,000 Contribution margin 75,000 Less: Fixed expenses 62,500 Net operating income $ 12,500 What is the contribution margin ratio?
Stonebraker Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range. Sales (9,000 units) $270,000 Variable expenses 189,000 Contribution margin 81,000 Fixed expenses 77,400 Net operating income $3,600 Required: A)If sales increase to 9,400 units, what would be the estimated increase in net operating income?B) If the variable cost per unit increases by $6, spending on advertising increases by $3,000, and unit sales increase by 19,200 units, what would be the estimated net operating income? C)Estimate how many units must be sold to achieve a target profit of $26,100.
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…
Whirly Corporation’s most recent income statement is shown below:Total Per UnitSales (10,000 units) ..................... $350,000 $35.00Variable expenses ....................... 200,000 20.00Contribution margin ..................... 150,000 $15.00Fixed expenses ........................... 135,000Net operating income .................. $ 15,000Required:Prepare a new contribution format income statement under each of the following conditions (consider eachcase independently):1. The sales volume increases by 100 units.2. The sales volume decreases by 100 units.3. The sales volume is 9,000 units.
Miller Company’s most recent contribution format income statement is shown below:Total Per UnitSales (20,000 units) ............................. $300,000 $15.00Variable expenses ............................... 180,000 9.00Contribution margin ............................. 120,000 $ 6.00Fixed expenses ................................... 70,000Net operating income .......................... $ 50,000Required:Prepare a new contribution format income statement under each of the following conditions (consider eachcase independently):1. The number of units sold increases by 15%.2. The selling price decreases by $1.50 per unit, and the number of units sold increases by 25%.
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…
Stonebraker Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range. Sales (9,000 units) $270,000 Variable expenses 189,000 Contribution margin 81,000 Fixed expenses 77,400 Net operating income $3,600 Required: A. What is the breakeven quantity? B. What is the breakeven sales dollar? C. What is the margin of safety in dollars? D. What is the degree of operating leverage? E. If sales increase to 9,400 units, what would be the estimated increase in net operating income? F. If the variable cost per unit increases by $6, spending on advertising increases by $3,000, and unit sales increase by 19,200 units, what would be the estimated net operating income? G. Estimate how many units must be sold to achieve a target profit of $26,100. Please help me to solve remaining sub parts.