Suppose management decided to produce both products. If the two models are sold in equal proportions, and total fixed costs amount to $552,800, what is the firm’s break-even point in units?
Q: A Accounts Payable AA Losses due to fire B Accounts Receivable BB Merchandise Inventory E…
A: Composite Journal entry - is a compound journal entry that is passed to record more than one entry…
Q: debt investments in available-for-sale securities.
A: Available for sale (AFS) is a term used for classifying financial assets. AFS is one of the three…
Q: Wildhorse, Inc. makes computer bags that sell for $30 each. For the coming year, management expects…
A: The revenue level at which a business isn't really profitable is known as break-even sales. This…
Q: (b) Using the cost-recovery method, compute the estimated gross profit that would be recognized…
A: Cost recovery method is one of the method used in construction contracts. Under this method, first…
Q: Wally is employed as an executive with Pay More Incorporated. To entice Wally to work for Pay More,…
A: A loan seems to be an amount of money borrowed from a bank or any other financial entity by one or…
Q: Emilio Co. had the following information relating to its accounts receivable: Accounts receivable,…
A: The allowance for doubtful accounts is created to record estimated bad debt expense for the period.…
Q: As auditors expect certain accounts to have more misstatements than others, both overstatements and…
A: Answer:- Auditing:- In order to confirm that a process or quality system is operating in accordance…
Q: On January 1, Year 1. Tec Corporation grants share appreciation rights to its CEO. Under the plan,…
A: Share appreciation rights represent a plan by a company to award a bonus to their employees or…
Q: You work as a freelance accounting professional and have been recently engaged by the auditors of…
A: DPS (Dividend per share) of the corporation is determined by dividing the dividend declared or…
Q: At the end of 20X6, Home Ltd. reported the following in shareholders' equity: Common shares, no par…
A: The company pays a dividend to the shareholders, the dividend is the distribution of profit between…
Q: Mention some ways other than cost-cutting that will improve company operations.
A: When making and analyzing the financial statements of a company we keep an eye on two main…
Q: The Foundational 15 (Algo) [LO3-1, LO3-2, LO3-3, LO3-4] [The following information applies to the…
A: Working Note : Manufacturing overhead applied to production = Predetermined overhead rate * Actual…
Q: Crane Company issues $26400000, 8.0%, 5-year bonds dated January 1, 2024 on January 1, 2024. The…
A: Time Value of Money :— According to this concept, value of money in present day is greater than the…
Q: DIRECTIONS: Using these data from Rollaird Company's comparative balance sheets, perform a…
A: Horizontal Analysis - Under Horizontal Analysis two years ledgers are compared of the same company.…
Q: Luis has $170,000 in his retirement account at his present company. Because he is assuming a…
A: Time value of money is a concept where interest component considered for time. Here we have to…
Q: Problem 15-20 1B. Can the calculation for alocation 2 be explained
A: So reciprocal methods are methods that are used to allocate service department cost to the other…
Q: Determine the single-value effective tax rate for a corporation that has a federal tax rate of 39%…
A: Effective tax rate is a single tax rate which determines overall tax paid on income. We can say that…
Q: Marco Company shows the following costs for three jobs worked on in April. Job 306 Job 307 $ 36,000…
A: Cost refers to the amount incurred by the company to obtain a final product from the manufacturing…
Q: Freeman Engineering paid $43,000 for specialized equipment for use with their new global positioning…
A: MACRS: It is stand for Modified Accelarated Cost Recovery System. It is a system used to calculate…
Q: A firm has not working capital of 4400, net fixed assets of $5646, sales of $5,100, and current…
A: A contract for a sale specifies the exchange of products or services for a specific sum of money. To…
Q: Robert was driving back to the office from his off-site construction job on Friday. He had put in a…
A: Variable expenses vary with the production and remains same per unit while fixed cost does not vary…
Q: accounting policies
A: Accounting policies mean the set of principles laid down by a venture’s management. These policies…
Q: 5. Presented below are items taken from the unadjusted trial balance of the Company and its branch…
A: Introduction The entire worth of the items you have in stock for sale at the conclusion of an…
Q: he adjusted account balances of Rose Merchandising Company on Dec. 31st of 2020 are below.…
A: The temporary accounts including expenses, revenue, dividend, withdrawals, are to be closed at the…
Q: Chalmers Corporation operates in multiple areas of the globe, and relatively large price changes are…
A: The contribution margin may be expressed on a gross used per basis. It represents the additional…
Q: Exercise 2-10 (Algo) Adjusting entries; solving for unknowns [LO2-5, 2-6] The Eldorado Corporation's…
A: Lets understand the basics. Adjustment entry is required to make to record to correct amount of…
Q: Exercise 3-6 (Algo) Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement…
A: The schedule used to determine the cost of producing things over a certain length of time is…
Q: Cougar Tree Services reports the following amounts on December 31, 2024. Cash Supplies Prepaid…
A: BALANCE SHEET Balance sheet is one of the Important Financial Statement of the Company. Balance…
Q: 2-27 Variable and fixed costs. Accounting firm Weetman, Doemen, & Co conducts a variety of…
A: Fixed and Variable Costs nature in Labor Costs When discussing labour costs, the term "fixed costs"…
Q: You work as a freelance accounting professional and have been recently engaged by the auditors of…
A: An income statement, also known as a profit and loss statement or P&L, is a financial statement…
Q: Required information Problem 7-45 Break-Even Analysis; Profit-Volume Graph; Movie Theaters (LO 7-1,…
A: Variable Cost :— It is the cost that changes with change in activity of cost driver. Variable cost…
Q: Required: 1. Compute the budgeted manufacturing overhead rate for each department 2. During…
A: "Since you have asked multiple questions, we will solve first question for you. If you want any…
Q: Houston’s Shredding Service has just completed a minor repair on a shredding machine. The repair…
A: INTRODUCTION: Depreciation is the deliberate, progressive decline in the reported value of an asset…
Q: Built-Tite uses job order costing. The T-account below summarizes Factory overhead activity for the…
A: Overhead :— It is the cost that are not directly incurred in the manufacturing of product during the…
Q: Which do you think is more important for controlling fixed overhead costs: the spending variance or…
A: (This is not a subjective matter of opinion but rather is based on accounting principles and theory…
Q: Your answer is incorrect. Bramble Company owns equipment that cost $1,026,000 and has accumulated…
A: An "impairment loss" is a decrease in an asset's fair market value that lowers its carrying amount.…
Q: Differentiate accounting and auditing. Answer thoroughly.
A: Every business does lots of financial transactions, and these transactions should be recorded as per…
Q: ples. assets. Company, organized in 2020, has the following transactions related to intangible…
A: Journal Entry :— It is an act of recording transaction in books of account when transaction…
Q: common stock, $1 par value, authorized 400,000 shares, issued 100,000 shares at an average price of…
A: Classified Balance Sheet The property, obligation, and capital totals on a classified balance sheet…
Q: During the year, IM Co. had sales of $900,000 including cash sales of $200,000 and $700,000 on…
A: "Since you have asked multiple questions, we will solve first question for you. If you want any…
Q: are the transactions of a new company called Pose-for-Pics. August 1 M. Harris, the owner,…
A: Answer : Journal entries : Date Account title Debit Credit Aug.1 Cash $5750 Photography…
Q: Travel Ltd provides tourism services to both local and foreign tourists in New Zealand. On 1 January…
A: Revaluation model - Under the revaluation model, the carrying value of fixed assets is adjusted as…
Q: WHAT IS THE IMPORTANCE OF THIS Throughout all business dealings, uphold high ethical standards.…
A: Business is defined as any unit that is engaged in executing activities. They may be involved in…
Q: Assume an assembly line worker records the following time for a normal 40-hom week, and assume the…
A: Direct labor is the kind of cost that can be directly attributed to the cost of production.…
Q: Jakarta Company is a service firm with current service revenue of $400,000 and a 40% contribution…
A: Margin of safety is the level of sales above the break even point sales. It is the difference…
Q: Audit testing relates to the completeness and occurrence assertions. Discuss the testing activities…
A: Vouching involves physically examining documents, such as invoices, contracts, or receipts, to…
Q: Which of the following statements regarding IFRS consolidated financial statements is/are correct:…
A: IFRS means international financial reporting standards which are used by accountants in time of…
Q: 1. Estimated fixed manufacturing overhead for the coming period of $220,000 2. Estimated variable…
A: Formula : Predetermined overhead rate = Total estimated overhead / Estimated direct labor hours
Q: What would you do in this situation?
A: Taxes are required to be paid and the file of the tax return is required to be filled as per the…
Q: ABC and CVP Analysis: Multiple Products Good Scent, Inc., produces two colognes: Rose and Violet. Of…
A: The overhead is allocated to the production on the basis of pre-determined overhead rate. The…
5. Suppose management decided to produce both products. If the two models are sold in equal proportions, and total fixed costs amount to $552,800, what is the firm’s break-even point in units?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- 1. The Davidson Corporation manufactures kitchen appliance to sell for $280. Last year company has sold 2000 units, compute gross profit IF (i) gross profit is 25% of cost of goods sold, (ii) gross profit is 25% of sales. 2. In 19A, the grant Company had sales of $19,950,000 with $11,571,000 variable and $7,623,000 fixed costs. 19B sales are expected to increase by 15% and cost relationship is expected to remain constant. Compute the expected operating income/(loss) of Company if sales increase by 20% in 19B. Also, Compute the expected operating income/(loss) of Company if sales decrease by 15% in 19B.Hrubec Products, Inc., operates a Pulp Division that manufactures wood pulp for use in the production of various paper goods. Revenue and costs associated with a ton of pulp follow: Selling price $ 23 Expenses: Variable $ 13 Fixed (based on a capacity of97,000 tons per year) 6 19 Net operating income $ 4 Hrubec Products has just acquired a small company that manufactures paper cartons. Hrubec plans to treat its newly acquired Carton Division as a profit center. The manager of the Carton Division is currently purchasing 29,000 tons of pulp per year from a supplier at a cost of $20.70 per ton. Hrubec’s president is anxious for the Carton Division to begin purchasing its pulp from the Pulp Division if the managers of the two divisions can negotiate an acceptable transfer price. Required: For (1) and (2) below, assume the Pulp Division can sell all of its pulp to outside customers for $23 per ton. 1. What is the Pulp Division's…Stratford Company distributes a lightweight lawn chair that sells for $15 per unit. Variable expenses are 40% of sales, and fixed expenses total $198,000 annually.Required:Answer the following independent questions:4. Assume that the operating results for last year were as follows:Sales $360,000 Less: Variable expenses 144,000 Contribution margin 216,000Less: Fixed expenses 198,000 Net operating income $ 18,000a. Compute the degree of operating leverage at the current level of sales.b. The president expects sales to increase by 15% next year. By how much should net operating income increase?5. Refer to the original data. Assume that the company sold 28,000 units last year. The sales manager is convinced that a 10% reduction in the selling price, combined with a $60,000 increase in advertising expenditures, would increase annual unit sales by 50%. Prepare two contribution format income statements: one showing the results of last year’s operations, and one showing what the results of…
- Agta Enterprises manufactures a product that sells for R180 each. The company presently produces and sells 50 000 units per year. Unit variable manufacturing and selling expenses are R90 and R18 respectively. Annual fixed costs are R2 200 000 for manufacturing overheads and R1 040 000 for selling and administrative activities Suppose the marketing manager proposes that the selling price be increased to R198 per unit. Calculate the amount by which fixed costs must decrease in order to achieve the company’s profit objective of R1 800 000, if 50 000 units are sold.Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $120 per unit. Variable expenses are $60.00 per unit, and fixed expenses total $200,000 per year. Its operating results for last year were as follows: Sales $ 3,000,000Variable expenses 1,500,000Contribution margin 1,500,000Fixed expenses 200,000Net operating income $ 1,300,000 Required: Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in dollar sales. 3. If this year's sales increase by $53,000 and fixed expenses do not change, how much will net operating income increase? 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's sales to increase by 10%. Using the degree of operating leverage from last year, what percentage increase in net operating income will the company realize this year? 5. The sales manager is convinced that a…Please answer the three questions below. Thanks! 1) Gilley, Inc., sells a single product. The company's most recent income statement is given below. Sales (4,000 units)- Variable Expenses Contribution Margin- Fixed ExpensesOperating Income $ 120,000(68,000)$ 52,000(42,000)$ 10,000 If 10 more units are sold, profits will increase by: 2) Using the information from Gilley, Inc. above, answer the following. The marketing manager believes that sales may increase next year by 20%. Using the operating leverage and the predicted increase in sales, what will TOTAL operating income be next year if the marketing manager is correct? 3) Using the information from Gilley, Inc. above, answer the following. The CEO of Gilley believes that sales will increase to 5,000 units next year and thinks that this may be a good time to lower variable cost and increase fixed costs through some minor automation in the plant. If they go ahead with this plan, variable costs per unit will…
- Hrubec Products. Inc., operates a Pulp Division that manufactures wood pulp for use in the production of various paper goods. Revenue and costs associated with a ton of pulp follow: Selling price $70 Expenses: Variable $42 Fixed (based on a capacity of 50,000 tons per year) 18 60 Net operating income $10 Hrubec Products has just acquired a small company that manufactures paper cartons. Hrubec Products has just acquired a small company that manufactures paper cartons. Hrubec plans to treat its newly acquired Carton division as a profit center. The manager of the Carton Division is currently purchasing 5,000 tons of pulp per year from a supplier at a cost of $63 per ton. Hrubec's resident is anxious for the Carton division to begin purchasing its pulp from the Pulp Division if an acceptable transfer price can be worked out. For (1) and (2) below, assume the Pulp Division can sell all of its pulp to outside customers for $70 per ton. 1. What is the lowest acceptable transfer price from…Feather Friends, Incorporated, distributes a high-quality wooden birdhouse that sells for $40 per unit. Variable expenses are $20.00 per unit, and fixed expenses total $200,000 per year. Its operating results for last year were as follows: Sales $ 1,040,000 Variable expenses 520,000 Contribution margin 520,000 Fixed expenses 200,000 Net operating income $ 320,000 Required: Answer each question independently based on the original data: 3. Assume this year’s unit sales and total sales increase by 58,000 units and $2,320,000, respectively. If the fixed expenses do not change, how much will net operating income increase? 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's unit sales to increase by 19%. Using the degree of operating leverage from last year, what percentage increase in net operating income will the company realize this year?Smirnoff Corp. invested P31,250,000 in a cabinet-making business. It expects to earn a 25% return on its investment in equipment used in the manufacturing the cabinets. Its consultants estimate that 10,000 units of cabinets next year. Estimated costs per unit of cabinet at this level follows: Variable manufacturing costs = P1,562.50; Fixed selling and administrative costs = P625.00; Fixed manufacturing costs = P312.50. To accomplish the company objective, one cabinet should be priced at:
- Vernon Corporation makes and sells state-of-the art electronics products. One of its segments produces the math machine, an in expensive calculator. The company's chief accountant recently prepared the following income statement showing annual revenues and expnses associated with the segment's operating activities. The relevant range for the production and sale of the range for the production and sale of the calculators is between 33,000 and 71,000 units per year. Revenue (47,000 unitsx9.00) $423,000 Unit-level variable costs Materials cost (47,000x$2.00) ($94,000) labor cost (47,000x1.00) ($47,000) manufacturing overhead (47,000x $0.20) ($9,400) shipping and handling (47,000x $0.24) ($11,280) Sales commissions (47,000x$2.00) ($94,000) contribution margin $167,320 Fixed expenses Advertising costs ($30,000) Salary of production supervisor ($66,000) Allocated company-wide facility-level expenses ($82,000) Net loss ($10,680) Required A) A large discount store has approached the…QUESTION 2- COST-VOLUME -PROFIT (CVP) Analysis Question matics 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 to…Orange Nebula Equipment Company (ONEC) manufactures a variety of harpooning equipment. The company would like to develop a unified approach to pricing its product line for next year using cost-plus pricing but does not know what cost base should be used. Last year, ONEC earned $150,000 of profit from sales of its products and would like to earn $225,000 next year. Last year, the company incurred the following costs: Manufacturing Costs: Variable 260,000.00 Fixed 160,000.00 Selling and Administraitve: Variable 90,000.00 Fixed 180,000.00 Calculate the Markup Percentage based on a cost basis of Cost of Goods Sold. (provide your answer in % form to two decimal places, i.e. 37.428% = 37.43)