Part 2 - CVP Analysis The condensed income statement of the Happy Valley Inn is as follows" Department Income $3,300,000 200,000 150,000 $3,650,000 900,000 1,400,000 1,350,000 472,500 877,500 Revenue S6,000,000 2,500,000 500,000 $9,000,000 Department Variable Costs Fixed Costs Room S1,800,000 $900,000 1,050,000 150,000 $2,100,000 Food and Bev 1,250,000 200,000 $3,250,000 Other Total Other Variable Other Fixed Costs Pre-Tax Income Tax Net Income 1) What is the contribution ratio for the Happy Valley Inn? 2) What is the break-even level of Sales for the Happy Valley Inn? 3) What level of sales are needed to earn $1,000,000 in net income? 4) What level of Room Sales are needed to earn $1,000,000 in net income? 5) What would be the projected net income at $10,000,000 in Sales?
Part 2 - CVP Analysis The condensed income statement of the Happy Valley Inn is as follows" Department Income $3,300,000 200,000 150,000 $3,650,000 900,000 1,400,000 1,350,000 472,500 877,500 Revenue S6,000,000 2,500,000 500,000 $9,000,000 Department Variable Costs Fixed Costs Room S1,800,000 $900,000 1,050,000 150,000 $2,100,000 Food and Bev 1,250,000 200,000 $3,250,000 Other Total Other Variable Other Fixed Costs Pre-Tax Income Tax Net Income 1) What is the contribution ratio for the Happy Valley Inn? 2) What is the break-even level of Sales for the Happy Valley Inn? 3) What level of sales are needed to earn $1,000,000 in net income? 4) What level of Room Sales are needed to earn $1,000,000 in net income? 5) What would be the projected net income at $10,000,000 in Sales?
Financial & Managerial Accounting
14th Edition
ISBN:9781337119207
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter20: Variable Costing For Management Analysis
Section: Chapter Questions
Problem 20.22EX: Variable costing income statement and contribution margin analysis for a service company The actual...
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