PROBLEM 6-23 CVP Applications; Contribution Margin Ratio: Degree of Operating Leverage LO6-1, LO6-3, LOG-4, LO6–5, LO6-8 Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $20 per unit. Variable expenses are $8 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows: Sales. $400,000 Variable expenses 160,000 Contribution margin Fixed expenses. 240,000 180,000 Net operating income $ 60.000

PROBLEM 6-23 CVP Applications; Contribution Margin Ratio: Degree of Operating Leverage LO6-1, LO6-3, LOG-4, LO6–5, LO6-8 Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $20 per unit. Variable expenses are $8 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows: Sales. $400,000 Variable expenses 160,000 Contribution margin Fixed expenses. 240,000 180,000 Net operating income $ 60.000

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter16: Financial Planning And Control

Section: Chapter Questions

Problem 10PROB

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Variable costing income statement and contribution margin analysis for a service company The actual and planned data for Underwater University for the Fall term were as follows: Actual Planned Enrollment 4,500 4,125 Tuition per credit hour 120 135 Credit hours 60,450 43,200 Registration, records, and marketing cost per enrolled student 275 275 Instructional costs per credit hour 64 60 Depreciation on classrooms and equipment 825,600 825,600 Registration, records, and marketing costs vary by the number of enrolled .students, while instructional costs vary by the number of credit hours. Depreciation is a fixed cost. A. Prepare a variable costing income statement showing the contribution margin and income from operations for the Fall term. B. Prepare a contribution margin analysis report comparing planned with actual performance for the Fall term.
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