Sheridan Bucket Co., a manufacturer of rain barrels, had the following data for 2021: Sales quantity Unit selling price Unit variable costs Fixed costs (a) 2,200 barrels $75 per barrel $45 per barrel $18,480 What is the contribution margin ratio? Contribution margin ratio %

Sheridan Bucket Co., a manufacturer of rain barrels, had the following data for 2021: Sales quantity Unit selling price Unit variable costs Fixed costs (a) 2,200 barrels $75 per barrel $45 per barrel $18,480 What is the contribution margin ratio? Contribution margin ratio %

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 2BE: Contribution margin Waite Company sells 250,000 units at 120 per unit. Variable costs are 78 per...

See similar textbooks

Related questions

Q: Bramble Corporation manufactures titanium and aluminum tennis racquets. Bramble's total overhead…

A: Activity-based costing refers to the method of costing that is used for identifying the activities…

Q: differences

A: *Repurchase agreement-repo is type of agreement in which the dealers will purchase the securities at…

Q: Below are costs associated with a car manufacturer. Number the costs below and indicate V or F for…

A: Variable costs are those costs which are changes with the level of activity. However, it does not…

Q: The corporation is the most effective form of business organization because the corporation has:…

A: There are many forms of business organization in which the business can be registered or…

Q: Every six months for 5 years, a father places Php8,200 in a trust fund for his only child's…

A: The future value of an annuity is the value of a group of recurring payments at a certain date in…

Q: What are depreciation and its purpose? Does the book value of a fixed asset (cost minus accumulated…

A: Depreciation is an expense which shows the decrease in the asset's value over the life of the asset…

Q: 1. Compute Bigley's fixed asset turnover ratio for 2016, 2017, and 2018. 2. During 2018, Papaya…

A: FIXED ASSETS TURN OVER RATIO Fixer Assets Turnover ratio indicates the investment in Fixed…

Q: Morganton Company makes one product and it provided the following information to help prepare the…

A: calculation of net operating income for July are as follows

Q: Indiana Bones, Inc., has the following account balances at the end of the year before adjustments:…

A: As per the allowance of doubtful account approach, the doubtful expense = Expected bad debt expense…

Q: Lindsey Company uses activity-based costing. The company has two products: A and B. The annual…

A: The process of allocating overhead and indirect expenses to goods and services is known as…

Q: What nominal rate compounded quarterly a principal yield interest that is equivalent to an effective…

A: The nominal rate has been computed quarterly and which has made the effective interest rate of 6%,…

Q: Twenty sets of office furniture are purchased with a down payment of Php90,000 and the ce at…

A: The monthly installments carry the payment of principal amount and payment for the interest also but…

Q: 5. The materials purchasing manager purchased 11,000 units of component K2X from a new source at a…

A: Lets understand the basics. Material price variance is a variance between the rate at which material…

Q: Flounder Corporation reports the following information: Correction of understatement of depreciation…

A: Note: When any expense is understated or overstated in the prior year's, the adjustment is made from…

Q: (indicate if the change is an increase or decrease)! Problem #5. The following data pertains to the…

A: Weighted Average Method :— It is one of the method of inventory valuation in which average cost per…

Q: The following information is available for Excelsior Corp for 2020: Payment for goods during year…

A: Cost may be categorized in different ways based on its nature. One of the most useful ways is…

Q: The comparative balance sheets of Carla Inc. at the beginning and the end of the year 2020 are as…

A: Cash flow statement is one of the financial statements which is prepared in order to check the cash…

Q: Chapter 12 Accounting for Partnerships and Limited Liability Companies 2-3 Dividing partnership…

A: Distribution Of Income between Partners in partnership :— Income is distributed between according to…

Q: The following balances appeared in the general ledger of Vice Traders on 30 June 20.2: R 60 000 270…

A: INCOME STATEMENT Income statement is one of the important financial statements of the Company.…

Q: Garza Corporation has two production departments, Casting and Customizing. The company uses a…

A: The question is based on the concept of Cost Accounting.

Q: An income statement for Sam's Bookstore for the first quarter of the year is presented below: Sam's…

A: The contribution margin is the additional revenue made for each product or unit sold after the…

Q: Consider each of the following separate situations that arose in 20X1: . Corporation G invested…

A: Bonds are a type of lending. The purchaser of bonds are entitled to get interest income on bonds…

Q: Darlentina Company provided the following information for the current year: Income from continuing…

A: It is given that: Income from continuing operations 4,000,000 Income from…

Q: During 2023, Door Inc. decided to dispose of Bell Division, which is considered a separate reporting…

A: The company is doing business to generate a profit. Sometimes, a company operates in two or more…

Q: Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin…

A: Under variable costing or marginal costing, net operating income is calculated by reducing fixed…

Q: Charlston Inc. has accounts receivable of $110,000 in an allowance for doubtful accounts of $17,000.…

A: Accounts receivables is the amount of receivables that an entity has to collect from its customers…

Q: Nogueiras Corp's budgeted monthly sales are P5,000, and they are constant from month to month. 40%…

A: Cash Budget: It is an estimation of cash receipts and payments over a forecast period. It could be…

Q: Hilton earned $80,000 each year from the booking activities (main operation) and $30,000 from the…

A: Reducing income or increasing expenses to save tax is known as tax evasion. Tax evasion is different…

Q: aving conducted the ethics audit, identify the formal and informal systems that are in need of…

A: An ethical audit seems to be a system or procedure examination or evaluation to guarantee conformity…

Q: Sharp Company manufactures a product for which the following standards have been set: Standard…

A: The resources and materials utilized in the creation of a product that may be directly connected to…

Q: Question A very basic restaurant does not provide employee meals, use transfers, or permit steward…

A: Introduction The overall account balance of inventory products that are available to be used or sale…

Q: What is an intangible asset? Should all intangible assets be subject to amortization? Explain why or…

A: An intangible asset is one that lacks a physical form. Intangible assets include goodwill, brand…

Q: Dazzle, Inc. produces beads for jewelry making use. The follow operations for June. The journal…

A: Answer : Work in process inventory = $87,000

Q: Ozzy Opticals is a full-service optical store providing eye exams and eyeglasses to customers. To…

A: Free on Board (FOB) is a commercial term used when the goods are transferred from the seller to the…

Q: risks

A: *Treasurers and fund managers are the one's who manage inflow and outflow of cash in a company,…

Q: The following are the accounts of Rosa-Perez Company: (1) Accounts Payable (2) Accounts Receivable…

A: A balance sheet is a kind of financial statement that provides information on an organization's…

Q: During 2021, its first year of operations, Baginski Steel Corporation reported a net operating loss…

A: Net operating loss is the amount which is resulted when the expenses of an entity are more than its…

Q: t of Stylus Corporation’s stock on January 2, 20X3, for $85,400 cash. Summarized balance sheet data…

A: A consolidated balance sheet refers to the form of a financial document that is prepared in order to…

Q: The following stockholders' equity accounts, arranged alphabetically, are in the ledge Common Stock…

A: Balance sheet shows the financial position of the company. It involve the assets, liabilities, and…

Q: Bramble Corporation manufactures titanium and aluminum tennis racquets. Bramble's total overhead…

A: Activity-based costing is used to allocate overhead expenses on the basis of activity. Other than…

Q: features of good government accounting

A: Introduction Government accounting refers to the accounting software used by government entities to…

Q: EcoFabrics has budgeted overhead costs of $945,000. It has allocated overhead on a plantwide basis…

A: Costing is defined as a mechanism used to determine the expenses paid by the industry while…

Q: Kate’s business is growing faster than she had predicted. In order to keep up, she will need to…

A: Any major expenditure which enhances a fixed asset in such a manner that it results in improvement…

Q: Tempo Company's fixed budget (based on sales of 16,000 units) folllows. Fixed Budget Sales (16,000…

A: Variable cost is the cost which is variable in nature. It keeps on changing with the change in the…

Q: Griffin Service Company, Inc., was organized by Bennett Griffin and five other investors (that is,…

A: Accounting equation represents that the asses is equal to the sum of liabilities and stockholders'…

Q: ashiro Inc. has decided to use the high-low method to estimate the total cost and the fixed and…

A: calculation of variable cost per unit and total fixed cost under high low method are as follows

Q: HOH INCOME Salary Business Income Interest Income from taxable bon Tax-exempt Bond interest Total…

A: Tax system is progressive that means as income increase with increase in income but there are some…

Q: Select from the following list the qualitative characteristic of useful information that best…

Q: Calculation of Book Value On June 1, 20--, a depreciable asset was acquired for $6,000. The asset…

A: Depreciation is considered as an expense charge on the value of the Asset. It can be calculated by…

Q: 2. James borrows, Php 700,000 and promises to pay the principal and interest at 15% compounded…

A: Time Value Of Money :— According to this concept, value of money in present day is greater than the…

Question

Sheridan Bucket Co., a manufacturer of rain barrels, had the following data for 2021:
Sales quantity
Unit selling price
Unit variable costs
Fixed costs
(a)
2,200 barrels
$75 per barrel
$45
per barrel
$18,480
What is the contribution margin ratio?
Contribution margin ratio
%

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Follow-up Questions

Read through expert solutions to related follow-up questions below.

Follow-up Question

What is the break-even point in sales dollars?
Break-even point $

Solution

by Bartleby Expert

SEE SOLUTION

Similar questions

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.
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.
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?
The cost data for Evencoat Paint for the year 2019 is as follows: Using the high-low method, express the companys maintenance costs as an equation where x represents the gallons of paint produced. Then estimate the fixed and variable costs. Predict the maintenance costs i190,000 gallons of paint are produced. Predict the maintenance costs if 81,000 gallons of paint are produced. Using Excel, create a scatter graph of the cost data and explain the relationship between gallons of paint produced and equipment maintenance expenses.
Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22 each in the coming year. Total variable costs equal 1,086,800. Total fixed costs equal 8,000,000. (Round all ratios to four significant digits, and round all dollar amounts to the nearest dollar.) Required: 1. What is the contribution margin per unit? What is the contribution margin ratio? 2. Calculate the sales revenue needed to break even. 3. Calculate the sales revenue needed to achieve a target profit of 245,000. 4. What if the average price per unit increased to 23.50? Recalculate: a. Contribution margin per unit b. Contribution margin ratio (rounded to four decimal places) c. Sales revenue needed to break even d. Sales revenue needed to achieve a target profit of 245,000
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?
Manatoah Manufacturing produces 3 models of window air conditioners: model 101, model 201, and model 301. The sales price and variable costs for these three models are as follows: The current product mix is 4:3:2. The three models share total fixed costs of $430,000. Calculate the sales price per composite unit. What is the contribution margin per composite unit? Calculate Manatoahs break-even point in both dollars and units. Using an income statement format, prove that this is the break-even point.
Olivian Company wants to earn 420,000 in net (after-tax) income next year. Its product is priced at 275 per unit. Product costs include: Variable selling expense is 14 per unit; fixed selling and administrative expense totals 290,000. Olivian has a tax rate of 40 percent. Required: 1. Calculate the before-tax profit needed to achieve an after-tax target of 420,000. 2. Calculate the number of units that will yield operating income calculated in Requirement 1 above. (Round to the nearest unit.) 3. Prepare an income statement for Olivian Company for the coming year based on the number of units computed in Requirement 2. 4. What if Olivian had a 35 percent tax rate? Would the units sold to reach a 420,000 target net income be higher or lower than the units calculated in Requirement 3? Calculate the number of units needed at the new tax rate. (Round dollar amounts to the nearest dollar and unit amounts to the nearest unit.)
Sales Needed to Earn Target Income Chillmax Company plans to sell 3,500 pairs of shoes at 60 each in the coming year. Variable cost is 35% of the sales price; contribution margin is 65% of the sales price. Total fixed cost equals 78,000 (includes fixed factory overhead and fixed selling and administrative expense). Required: 1. Calculate the sales revenue that Chillmax must make to earn operating income of 81,900 by using the point in sales equation. 2. Check your answer by preparing a contribution margin income statement based on the sales dollars calculated in Requirement 1.
The sales price per unit is 13 for the Voyageur Companys only product. The variable cost per unit is 5. In 2016, the company sold 80,000 units, which was 10,000 units above the break-even point. Compute the following: 1. Total fixed expenses. (Hint: First compute the contribution margin per unit.) 2. Total variable expense at the break-even volume.
Garrett Company provided the following information: Common fixed cost totaled 46,000. Garrett allocates common fixed cost to Product 1 and Product 2 on the basis of sales. If Product 2 is dropped, which of the following is true? a. Sales will increase by 300,000. b. Overall operating income will increase by 2,600. c. Overall operating income will decrease by 25,000. d. Overall operating income will not change. e. Common fixed cost will decrease by 27,600.
Variable Cost Ratio, Contribution Margin Ratio Chillmax Company plans to sell 3,500 pairs of shoes at 60 each in the coming year. Unit variable cost is 21 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Fixed factory overhead is 30,000 and fixed selling and administrative expense is 48,000. Required: 1. Calculate the variable cost ratio. 2. Calculate the contribution margin ratio. 3. Prepare a contribution margin income statement based on the budgeted figures for next year. In a column next to the income statement, show the percentages based on sales for sales, total variable cost, and total contribution margin.