Answered: sales 4,800,000…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 4BE

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Question

sales 4,800,000

COGS 1,200,000

Gross profit 3,600,000

Expenses 480,000

operating income 3,120,000

sold 30,000,000 barrels

variable costs are .75 x 1200000 + .5 x 480000 = 900 + 240 = 1,140,000

The remaining costs are fixed.

The following year all items remain constant except the fixed costs are expected to increas by 1$6,200,000.

a) compute the break even sales in barrels for the current year.

b) compute the break even sales in barrels for the following year.

Please share the calculations.

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Break-even sales under present and proposed conditions Kearney Company, operating at full capacity, sold 400,000 units at a price of $246.60 per unit during 20Y5. Its income statement for 20Y5 is as follows: The division of costs between fixed and variable is as follows: Management is considering a plant expansion program that will permit an increase of $8,631,000 (35.000 units at $246.60) in yearly sales. The expansion will increase fixed costs by $3,600,000 but will not affect the relationship between sales and variable costs. Instructions Determine the maximum operating income possible with the expanded plant.

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