Problem 1-21 (Static) Traditional and Contribution Format Income Statements [LO1-6] Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $2,450 per unit and then sell hem to retail customers for an average price of $3125 each. The company's selling and administrative costs for a typical month resented below: Costs Selling: Advertising Sales salaries and commissions Delivery of pianos to customers Utilities Cost Formula $700 per month $958 per month, plus 8% of sales $ 30 per piano sold $350 per month $ 800 per month Depreciation of sales facilities Administrative: Executive salaries Insurance Clerical Depreciation of office equipment ring August, Marwick's Pianos, Incorporated, sold and delivered 40 planos. A $ 2,500 per month $ 400 per month $1,000 per month, plus $20 per piano sold $ 300 per month quired: repare a traditional format income statement for August. Prepare a contribution format income statement for August. Show costs and revenues on both a total and a per unit basis ough contribution margin. Complete this question by entering your answers in the tabs below. Prev 19 of 19 Next

Problem 1-21 (Static) Traditional and Contribution Format Income Statements [LO1-6] Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $2,450 per unit and then sell hem to retail customers for an average price of $3125 each. The company's selling and administrative costs for a typical month resented below: Costs Selling: Advertising Sales salaries and commissions Delivery of pianos to customers Utilities Cost Formula $700 per month $958 per month, plus 8% of sales $ 30 per piano sold $350 per month $ 800 per month Depreciation of sales facilities Administrative: Executive salaries Insurance Clerical Depreciation of office equipment ring August, Marwick's Pianos, Incorporated, sold and delivered 40 planos. A $ 2,500 per month $ 400 per month $1,000 per month, plus $20 per piano sold $ 300 per month quired: repare a traditional format income statement for August. Prepare a contribution format income statement for August. Show costs and revenues on both a total and a per unit basis ough contribution margin. Complete this question by entering your answers in the tabs below. Prev 19 of 19 Next

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

Chapter2: Basic Managerial Accounting Concepts

Section: Chapter Questions

Problem 18MCQ: 2-18 Use the following information for Multiple- Choice Questions 2-13 through 2-18: Last year,...

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Ma2. Q4 Bundoora Enterprises operates a single-product entity. Data relating to the product for 2020 were as follows: Annual Volume 45,000 Units Selling price per unit $65 Variable manufacturing cost per unit $25 Annual fixed manufacturing costs $155,000 Variable marketing and distribution costs per unit $15 Annual fixed non-manufacturing costs $445,000 a) Calculate and interpret the break-even in units for 2020. b) Calculate and interpret the margin of safety in both units and sales dollars. c) Calculate and interpret the profit achieved in 2020.d) Changes in marketing strategy are planned for 2021. This would increase variable marketing and distribution costs by $15 per unit and reduce fixed non-manufacturing costs by $100,000 per year. Calculate and interpret the units that would need to be sold in 2021 to achieve the same profit as in 2020.
Choose the correct letter of answer In 20x2 the Cranky Processing Company had the following data coming from its income statement (in Pesos): Sales, P1,200,000; Variable costs: (a) Goods sold, P400,000 and (b) S&A Expenses, P100,000; Fixed costs: (a) Factory overhead, P110,000, and S&A Expenses, P80,000. Income tax rate is 15%. Determine the required peso sales to provide an after-tax net income of P150,000. a. P261,765b. P176,471c. P366,471d. P628,235
Subject - Acounting Last month when Holiday Creations, Incorporated, sold 41,000 units, total sales were $164,000, total variable expenses were $137,760, and fixed expenses were $37,400. Required: 1. What is the company’s contribution margin (CM) ratio? 2. What is the estimated change in the company’s net operating income if it can increase sales volume by 450 units and total sales by $1,800? (Do not round intermediate calculations.)
14. Micky2, Inc. sells two products X and Y. Data concerning the company for July follow: Product X: sales - P200,000; variable expense - P50,000; and traceable fixed expenses - P80,000. For Product Y: sales - P300,000, variable expenses - P100,000 and traceable fixed expenses - P150,000. In addition there were common fixed expenses of P70,000 in July. What was the entire company's net income ? P50,000 P70,000 P150,000 P120,000
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…
QUESTION 2- COST-VOLUME -PROFIT (CVP) Analysis Question ) Telematics Incorporated manufactures flat-screen television sets. The company’s contribution format income statement for 2021 is given below: Total Per Unit Percentage of Sales Sales (25,000 units) $ 2,500,000 $ 100 100% Less variable expenses $ 1,500,000 $ 60 ? % Contribution Margin $ 1,000,000 $ 40 ? % Less Fixed Expenses $ 800,000 Operating Income $ 200,000 Management believes operating income can be further improved and would like you to prepare the following analysis: Required: Compute the company’s Contribution Margin ( CM ) ratio and variable expense ratio.\ Compute the company’s break-even point in both units and sales dollars. Use the equation method Assume that sales increase by $ 600,000 next year. If cost behaviour patterns remain unchanged, by how much will the company’s operating income increase. Use the Contribution Margin (CM) ratio…
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…
The Variable Cost of Goods Sold in the Marin Company totals P325,000. Fixed selling and administrative expenses totaled P115,000 and variable selling and administrative expenses were P210,000. If Marin Company's contribution margin totaled P590,000, then sales is? What is the effect of this in the ompany of Marin? a.P650,000 B.Ph 915,000 C.Ph 1,030,000 D.Ph 1,125,000 Topic: Cost Volume Profit Please explain each clearly and solve in good form. Format: 1. What is the nature of the problem? 2. What is being asked in the problem? 3. Solution (with clear explanation on how it happened and step by step solution) (also explain why did you multiply, add, minus or divide) (explain every detail and the concept) 4. Conclusion (explain how you can relate it in real situation)
The Variable Cost of Goods Sold in the Marin Company totals P325,000. Fixed selling and administrative expenses totaled P115,000 and variable selling and administrative expenses were P210,000. If Marin Company's contribution margin totaled P590,000, then sales is? What is the effect of this in the ompany of Marin? a.P650,000 B.Ph 915,000 C.Ph 1,030,000 D.Ph 1,125,000 Topic: Cost Volume Profit Please explain the nature of the problem, what is being asked, how to solve it and what would be the effect of that in Marin Company
Problem II. Omega Enterprises sells two products, Model E100 and F900. Monthly sales and the contribution margin ratios for the two products, follow: Product E100 F900 Total Sales P 700,000 P 300,000 P 1,000,000 Contribution margin ratio 60% 70% The Company’s fixed expenses total P598,500 per month. What is the company’s total contribution margin ratio? What is the company’s total net operating income? The break-even point for the company based on the current sales mix is ______.
13. Micky2, Inc. sells two products X and Y. Data concerning the company for July follow: Product X: sales - P200,000; variable expense - P50,000; and traceable fixed expenses - P80,000. For Product Y: sales - P300,000, variable expenses - P100,000 and traceable fixed expenses - P150,000. In addition there were common fixed expenses of P70,000 in July. What was the segment margin for Product X? P70,000 P38,000 P120,000 P150,000
PDF Advisory and Tax Services provides primarily two lines of service: Advisory and Tax. Advisory services represent 0.60 of its revenue and provide a contribution margin ratio of 0.30 Tax services represent 0.40 of its revenue and provide a 0.40 contribution margin ratio. The company’s fixed costs are $4,250,000. Required Compute the weighted average contribution margin ratio. Compute the total revenue required to break even. Calculate the revenue from each type of service that the company must achieve to break even.