need help please Riveria Co. makes and sells a single product. The current selling price is $39 per unit. Variable expenses are $20 per unit, and fixedexpenses total $35,500 per month. Sales volume for May totaled 4,700 units.Required:a. Calculate operating income for May.b. Calculate the breakeven point in terms of units sold and total revenues.c. Management is considering installing automated equipment to reduce direct labor cost. If this were done, variable expenses woulddrop to $14 per unit, but fixed expenses would increase to $60,100 per month.1. Calculate operating income at a volume of 4,700 units per month with the new cost structure.2. Calculate the breakeven point in units with the new cost structure.3. Why would you suggest that management seriously consider investing in the automated equipment and accept the new coststructure?4. Why might management not accept your recommendation but decide instead to maintain the old cost structure?Complete this question by entering your answers in the tabs below.Required ARequired BRequired C1Required C2Required C3Required C4Management is considering installing automated equipment to reduce direct labor cost. If this were donė, variable expenseswould drop to $14 per unit, but fixed expenses would increase to $60,100 per month. Why would you suggest thatmanagement seriously consider investing in the automated equipment and accept the new cost structure?As sales volume moves above the break-even point, contribution margin and operating income willby a relatively greater amount than under the old cost structure. Riveria Co. makes and sells a single product. The current selling price is $39 per unit. Variable expenses are $20 per unit, and fixedexpenses total $35,500 per month. Sales volume for May totaled 4,700 units.Required:a. Calculate operating income for May.b. Calculate the breakeven point in terms of units sold and total revenues.c. Management is considering installing automated equipment to reduce direct labor cost. If this were done, variable expenses woulddrop to $14 per unit, but fixed expenses would increase to $60,100 per month.1. Calculate operating income at a volume of 4,700 units per month with the new cost structure.2. Calculate the breakeven point in units with the new cost structure.3. Why would you suggest that management seriously consider investing in the automated equipment and accept the new coststructure?4. Why might management not accept your tecommendation but decide instead to maintain the old cost structure?Complete this question by entering your answers in the tabs below.Required ARequired BRequired C1Required C2Required C3RequiredIc4Management is considering installing automated equipment to reduce direct labor cost. If this were done, variable expenseswould drop to $14 per unit, but fixed expenses would increase to $60,100 per month. Why might management not acceptyour recommendation but decide instead to maintain the old cost structure?Thecost structure has much more risk.

Name: need help please Riveria Co. makes and sells a single product. The cur
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Description: need help please Riveria Co. makes and sells a single product. The current selling price is $39 per unit. Variable expenses are $20 per unit, and fixedexpenses total $35,500 per month. Sales volume for May totaled 4,700 units.Required:a. Calculate op

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Riveria Co. makes and sells a single product. The current selling price is $39 per unit. Variable expenses are $20 per unit, and fixed expenses total $35,500 per month. Sales volume for May totaled 4,700 units. Required: a. Calculate operating income for May. b. Calculate the breakeven point in terms of units sold and total revenues. c. Management is considering installing automated equipment to reduce direct labor cost. If this were done, variable expenses would drop to $14 per unit, but fixed expenses would increase to $60,100 per month. 1. Calculate operating income at a volume of 4,700 units per month with the new cost structure. 2. Calculate the breakeven point in units with the new cost structure. 3. Why would you suggest that management seriously consider investing in the automated equipment and accept the new cost structure? 4. Why might management not accept your recommendation but decide instead to maintain the old cost structure?

Riveria Co. makes and sells a single product. The current selling price is $39 per unit. Variable expenses are $20 per unit, and fixed expenses total $35,500 per month. Sales volume for May totaled 4,700 units. Required: a. Calculate operating income for May. b. Calculate the breakeven point in terms of units sold and total revenues. c. Management is considering installing automated equipment to reduce direct labor cost. If this were done, variable expenses would drop to $14 per unit, but fixed expenses would increase to $60,100 per month. 1. Calculate operating income at a volume of 4,700 units per month with the new cost structure. 2. Calculate the breakeven point in units with the new cost structure. 3. Why would you suggest that management seriously consider investing in the automated equipment and accept the new cost structure? 4. Why might management not accept your recommendation but decide instead to maintain the old cost structure?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 6EA: Marlin Motors sells a single product with a selling price of $400 with variable costs per unit of...

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A company has prepared the following statistics regarding its production and sales at different capacity levels. Total costs: 1. At what point is break-even reached in sales dollars? In units? (Hint: Use the capacity level to determine the number of units.) 2. If the company is operating at 60% capacity, should it accept an offer from a customer to buy 10,000 units at 3 per unit?
Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90. The companys monthly fixed expenses are $180,000. What is the companys break-even point in units? What is the companys break-even point in dollars? Prepare a contribution margin income statement for the month of October when they will sell 10,000 units. How many units will Cadre need to sell in order to realize a target profit of $300,000? What dollar sales will Cadre need to generate in order to realize a target profit of $300,000? Construct a contribution margin income statement for the month of August that reflects $2,400,000 in sales revenue for Cadre, Inc.
Kerr Manufacturing sells a single product with a selling price of $600 with variable costs per unit of $360. The companys monthly fixed expenses are $72,000. What is the companys break-even point in units? What is the companys break-even point in dollars? Prepare a contribution margin income statement for the month of January when they will sell 500 units. How many units will Kerr need to sell in order to realize a target profit of $120,000? What dollar sales will Kerr need to generate in order to realize a target profit of $120,000? Construct a contribution margin income statement for the month of June that reflects $600,000 in sales revenue for Kerr Manufacturing.
Bolger and Co. manufactures large gaskets for the turbine industry. Bolgers per-unit sales price and variable costs for the current year are as follows: Bolgers total fixed costs aggregate to 360,000. Bolgers labor agreement is expiring at the end of the year, and management is concerned about the effects of a new labor agreement on its break-even point in units. The controller performed a sensitivity analysis to ascertain the estimated effect of a 10-per-unit direct labor increase and a 10,000 reduction in fixed costs. Based on these data, the break-even point would: a. decrease by 1,000 units. b. decrease by 125 units. c. increase by 375 units. d. increase by 500 units.
Western Trucking operates a fleet of delivery trucks. The fixed expenses to operate the fleet are $79,900 in March and rose to $93,120 in April. It costs Western Trucking $0.15 per mile in variable costs. In March, the delivery trucks were driven a total of 85,000 miles, and in April,. they were driven a total of 96,000 miles. Using this information, answer the following: A. What were the total costs to operate the fleet in March and April, respectively? B. What were the cost per mile to operate the fleet in March and April, respectively?
Maple Enterprises sells a single product with a selling price of $75 and variable costs per unit of $30. The companys monthly fixed expenses are $22,500. What is the companys break-even point in units? What is the companys break-even point in dollars? Construct a contribution margin income statement for the month of September when they will sell 900 units. How many units will Maple need to sell in order to reach a target profit of $45,000? What dollar sales will Maple need in order to reach a target profit of $45,000? Construct a contribution margin income statement for Maple that reflects $150,000 in sales volume.
Klamath Company produces a single product. The projected income statement for the coming year is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. 2. Suppose 10,000 units are sold above break-even. What is the operating income? 3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue. (Note: Round the contribution margin ratio to four decimal places, and round the sales revenue to the nearest dollar.) Suppose that revenues are 200,000 more than expected for the coming year. What would the total operating income be?
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Markham Farms reports the following contribution margin income statement for the month of August. The company has the opportunity to purchase new machinery that will reduce its variable cost per unit by $2 but will increase fixed costs by 15%. Prepare a projected contribution margin income statement for Markham Farm assuming it purchases the new equipment. Assume sales level remains unchanged.
Wellington, Inc., reports the following contribution margin income statement for the month of May. The company has the opportunity to purchase new machinery that will reduce its variable cost per unit by $10 but will increase fixed costs by 20%. Prepare a projected contribution margin income statement for Wellington, Inc., assuming it purchases the new equipment. Assume sales level remains unchanged.
Marlin Motors sells a single product with a selling price of $400 with variable costs per unit of $160. The companys monthly fixed expenses are $36,000. What is the companys break-even point in units? What is the companys break-even point in dollars? Prepare a contribution margin income statement for the month of November when they will sell 130 units. How many units will Marlin need to sell in order to realize a target profit of $48,000? What dollar sales will Marlin need to generate in order to realize a target profit of $48.000? Construct a contribution margin income statement for the month of February that reflects $200,000 in sales revenue for Marlin Motors.
Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?