Last month Annie's Homemade sold 5,000 servings of ice cream for $5.00 each. Its variable cost is $1.25 per serving and its total fixed costs were $11,000. Required: 1. What was last month's margin of safety? 2. What was last month's margin of safety percentage?
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Q: break-even point
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- Sherri’s Tan-O-Rama is a local tanning salon. Its regression output is as follows: Coefficients Intercept 4,649.75 X Variable 1 2.12 Suppose that the company charges $7.40 per tanning session. Required: 1. Calculate the unit contribution margin.2. Calculate contribution margin ratio.3. Calculate the total contribution margin if the shop books 1,000 tanning sessions this month.Outback Outfitters sells recreational equipment. One of the company’s products, a small camp stove, sells for $90 per unit. Variable expenses are $63 per stove, and fixed expenses associated with the stove total $121,500 per month. Required: 1. What is the break-even point in unit sales and in dollar sales? 2. If the variable expenses per stove increase as a percentage of the selling price, will it result in a higher or a lower break-even point? (Assume that the fixed expenses remain unchanged.) 3. At present, the company is selling 11,000 stoves per month. The sales manager is convinced that a 10% reduction in the selling price would result in a 25% increase in monthly sales of stoves. Prepare two contribution format income statements, one under present operating conditions, and one as operations would appear after the proposed changes. 4. Refer to the data in Required 3. How many stoves would have to be sold at the new selling price to attain a target profit of $71,000 per month?= Adam's Repair Shop has a monthly target operating income of $12,500. Variable expenses are 75% of sales, and monthly fixed expenses are $9,500. Hint: The contribution margin ratio= 100% - Variable expenses percentage of sales. Read the requirements. Requirement 1. Compute the monthly margin of safety in dollars if the shop achieves its income goal. Begin by identifying the formula to compute the margin of safety. = Margin of safety in dollars (Round intermediate calculations up to the nearest whole dollar and your final answer to the nearest whole dollar.) The margin of safety is Requirement 2. Express Adam's margin of safety as a percentage of target sales. Begin by identifying the formula to compute the margin of safety as a percentage of target sales. (Round the percentage to the nearest whole percent.) The margin of safety percentage is % of target sales. Requirement 3. What is Adam's operating leverage factor at the target level of operating income? Begin by identifying the…
- Liberty Coffee sells three small coffees for every large coffee. A small coffee sells for $3.00, with a variable expense of $1.50. A large coffee sells for $5.00, with a variable expense of $2.50.Requirements1. Determine the coffee shop’s monthly breakeven point in the numbers of small coffees and large coffees. Prove your answer by preparing a summary contribution margin income statement at the breakeven level of sales. Show only two categories of expenses: variable and fixed.2. Compute the coffee shop’s margin of safety in dollars.3. Use the coffee shop’s operating leverage factor (using the July contribution margin income statement) to determine its new operating income if sales volume increases 12%. Prove your results using the contribution margin income statement format. Assume that sales mix remains unchanged.Last month when Holiday shane, Inc., sold 42,000 units, total sales were $400,000, total variable expenses were $244,000, and fixed expenses were $39,700. 20 questions left-Renews M Required: Enter question 1. What is the company's contribution margin (CM) ratio?sanju
- Feather Friends, Incorporated, distributes a high-quality wooden birdhouse that sells for $40 per unit. Variable expenses are $20.00 per unit, and fixed expenses total $200,000 per year. Its operating results for last year were as follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income Required: Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in dollar sales. 3. Assume this year's unit sales and total sales increase by 59,000 units and $2,360,000, respectively. If the fixed expenses do not change, how much will net operating income increase? $ 1,000,000 500,000 500,000 200,000 $ 300,000 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's unit sales to increase by 19%. Using the degree of operating leverage from last year, what percentage increase in net operating income will the…Mauro Products sells a woven basket for $10 per unit. Its variable expense is $8 per unit and the company's monthly fixed expense is $2,600. Required: 1. Calculate the company's break-even point in unit sales. 2. Calculate the company's break-even point in dollar sales. Note: Do not round intermediate calculations. 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? Note: Do not round intermediate calculations. 1. Break-even point in unit sales 2. Break-even point in dollar sales 3. Break-even point in unit sales 3. Break-even point in dollar sales baskets basketsOutback Outfitters sells recreational equipment. One of the company's products, a small camp stove, sells for $130 per unit. Variable expenses are $91 per stove, and fixed expenses associated with the stove total $191,100 per month. Required: 1. What is the break-even point in unit sales and in dollar sales? 2. If the variable expenses per stove increase as a percentage of the selling price, will it result in a higher or a lower break-even point? (Assume that the fixed expenses remain unchanged.) 3. At present, the company is selling 15,000 stoves per month. The sales manager is convinced that a 10% reduction in the selling price would result in a 25% increase in monthly sales of stoves. Prepare two contribution format income statements, one under present operating conditions, and one as operations would appear after the proposed changes. 4. Refer to the data in Required 3. How many stoves would have to be sold at the new selling price to attain a target profit of $71,000 per month?…
- Mauro Products sells a woven basket for $14 per unit. Its variable expense is $11 per unit and the company's monthly fixed expense is $9,000. Required: 1 Calculate the company's break-even point in unit sales 2 Calculate the company's break-even point in dollar sales Note: Do not round intermediate calculations. 3. If the company's fixed expenses increase by $600, what would become the new break even point in unit sales? In dollar sales? Note: Do not round intermediate calculations. 1. Break-even point in unit sales 2 Break-even point in dollar sales 3. Break-even point in unit sales 3. Break-even point in dollar sales baskets basketsPlease provide answer in text (Without image)Kaplan, Inc. produces flash drives for computers, which it sells for $20 each. The variable cost to make each flash drive is $13. Fixed costs for April were $1 400. How much is the monthly breakeven level of sales in dollars for Kaplan? a. 43 O b. None C. 70 O d. 200 Oe. 108