Variable costs as a percentage of sales for Lemon Inc. are 77%, current sales are $601,000, and fixed costs are $202,000. How much will operating income change if sales increase by $36,800? a.$8,464 increase b.$28,336 decrease c.$28,336 increase d.$8,464 decrease

Variable costs as a percentage of sales for Lemon Inc. are 77%, current sales are $601,000, and fixed costs are $202,000. How much will operating income change if sales increase by $36,800? a.$8,464 increase b.$28,336 decrease c.$28,336 increase d.$8,464 decrease

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 14EB: Company A has current sales of $4,000,000 and a 45% contribution margin. Its fixed costs are...

See similar textbooks

Related questions

Q: Margin of Safety a. If Canace Company, with a break-even point at $529,300 of sales, has actual…

A: "Since you have asked multiple question we will solve the first question for you. If you want any…

Q: ABC Company manufactures the product XE-17. The product is sold at a unit price of $70. Variable…

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: Required information [The following information applies to the questions displayed below.] Data for…

A: Net operating income, or NOI for short, is a metric used to determine the profitability of a…

Q: Margin of Safety a. If Canace Company, with a break-even point at $401,800 of sales, has actual…

A: The Margin of Safety - The margin of safety is the difference between break-even sales and Actual…

Q: i know the answer but i want to know the steps. thank you

A: given information: Amount ($) % Selling price per unit $10 100 Variable cost per unit $4 40%…

Q: The 39444-TH company sells its product for $25 per unit. The variable expenses are $15 per unit. The…

A: PV Ratio =contribution sales ×100 =520,000130,000×100 =40%…

Q: Spice Inc.'s unit selling price is $46, the unit variable costs are $31, fixed costs are $106,000,…

A: Values given in the question Unit selling Price = $46 Unit variable cost = $31 Contribution per…

Q: Margin of Safety a. If Canace Company, with a break-even point at $464,000 of sales, has actual…

A: Margin of safety refers computation of how much output or sales level can fall before a business…

Q: Olyphant, Inc. has provided the following data: Sales price Sales Fixed cost Variable cost $200 per…

A: Solution : Existing contribution margin per unit = Selling price per unit - Variable cost per unit =…

Q: The Unique Toys Company manufactures and sells toys. Currently, 300,000 units are sold per year at…

A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

Q: Data concerning Dorazio Corporation's single product appear below: Percent of Per Unit Sales Selling…

A: Solution: Contribution margin from increased sales units and loss of contribution margin on existing…

Q: Lee Gon Corporation has the following revenue and cost characteristics on their only product:…

A: If 5% increase in selling price P6.00 + P6.00 *5% = 6.3 Variable cost = P4.20 Contribution = selling…

Q: Margin of Safety a. If Canace Company, with a break-even point at $386,900 of sales, has actual…

A: Margin of Safety represents the value of sales over and above the break-even point.Margin of Safety…

Q: Total Sales revenue (30,000 units) $750,000 Variable costs 450,000 Contribution margin 300,000 ?…

A: Break-Even Point: Your company has reached its break-even point when its entire expenses and total…

Q: Assuming that NUBD increased sales of Product X by 25 percent, what should the profit from Product X…

A: Current Profit Calculation Particular Amount A Sales 300,000 B Variable cost…

Q: Spice Inc.'s unit selling price is $51. the unit variable costs are $38, fixed costs are $102.000,…

A: Operating income involves the income generated by normal business transactions. This means that the…

Q: Smart company Sold 11,000 softwares during current year For $440,000 , Variable costs are $110,000…

A: The contribution margin is calculated as difference between sales revenue and variable costs.

Q: Operating Leverage Snellville Co. reports the following data: Sales $483,900 Variable costs 329,100…

A: Degree of Operating Leverage: Degree of operating leverage is an efficiency ratio which evaluates…

Q: ABC Company manufactures the product XE-17. The product is sold at a unit price of $70. Variable…

A: Break-even point is the point of the entity where it is incurring or earning no loss or profit…

Q: Franklin Producers sells its core product for $9 per unit and has variable costs of $7 per unit.…

Q: Data concerning Kardas Corporation's single product appear below: Percent of Sales 100% Per Unit…

A: Current profit = Contribution margin per unit x no. of units sold - fixed expenses =…

Q: Contribution Margin Income Statement of a single product company Total Per unit Sales…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Norwood Industries has annual fixed costs of $1.8 million. Unit variable costs are currently 55% of…

A: Answer) Calculation of Expected Operating Income if Selling price is increased by 10% Expected…

Q: Gilley, Inc., sells a single product. The company's most recent income statement is given below.…

A: Contribution margin per unit = Contribution margin / No. of units

Q: A company has provided the following data: Sales 3,000 Units Sales price $ 70 per unit…

A: Projected sales = 3000 units x ( 1 - 0.25) = 2,250 units

Q: a. If Canace Company, with a break-even point at $384,000 of sales, has actual sales of $480,000,…

A: Margin of safety: Difference between total sales and break even sales is called margin of safety.…

Q: Statement of Comprehensive Income for Brooklyn Company for the current year is Sales Variable cost…

A: Leverage: It can be defined as the technique of making use of borrowed funds by the business in its…

Q: Need explanation Changes in Variable Costs, Fixed Costs, Selling Price, and Volume Data for Hermann…

A: Lets understand the basics. Contribution margin is a margin generated from the sales. Contribution…

Q: Margin of Safety a. If Canace Company, with a break-even point at $386,900 of sales, has actual…

A: a. 1. Calculate the margin of safety (in Dollars).

Q: Zeta Corp's most recent income statement is given below. Sales (8,000 units) Less variable expenses…

A: Sales price per unit = Sales / Total no. of units sold = $160,000 / 8,000 units = $20 per unit…

Q: Davidson company has sales of 100,000 variable cost of goods sold od $40,000 variables seeing…

A: Contribution Margin: The contribution margin is the difference between a product's selling price…

Q: Following is the last year data of X company: Selling price Variable expenses $80 per unit $40 per…

A: Advertising expenses: These are the expenses incurred by the company to promote the products.…

Q: The Variable Cost of Goods Sold in the Marin Company totals P325,000. Fixed selling and…

A: Variable Costing - In this costing method, variable costs are considered while preparing the cost of…

Q: Ajani Company has variable costs equal to 40% of sales. The company is considering a proposal that…

A: Variable costs on increased sales = Increase in sales x 40% = $10,000 x 40% = $4,000

Q: Kreter, Inc. earned net income of $300,000 last year. This year it wants to earn net income of…

A: Cost-Volume-Profit (CVP) Analysis: It is the technique of managerial accounting that examines how…

Q: Required information [The following information applies to the questions displayed below.] Data for…

A: SOLUTION- THE CONTRIBUTION MARGIN INCOME STATEMENT IS PREPARED BY DEDUCTING THE AMOUNT OF VARIABLE…

Q: Data concerning Runnells Corporation's single product appear below: Per Unit % of Sales Selling…

A: Marginal Costing - Marginal Costing is the method of computing operating profit by bifurcating…

Q: Assume the following information: Amount Per Unit Sales $ 300,000 $ 40 Variable…

A: The measurement of net operating income (NOI) is used to assess the viability of income-generating…

Q: Titanic Roofing Company has estimated the following amounts for its next fiscal year: Total fixed…

A: Due to additional sale of units the contribution increases and fixed costs remain same. Thus…

Q: Data concerning Sotero Corporation's single product appear below:…

A: Following data are given for the required solution: Contribution margin per unit = $84 Increase in…

Q: Required information [The following information applies to the questions displayed below.] Data for…

A: Contribution means the difference between the selling price and variable cost . Fixed cost when…

Q: Variable costs as a percentage of sales for Lemon Inc. are 79%, current sales are $653,000, and…

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

Q: ABC has a per unit contribution margin of $110. If sales increase by 60 units fixed costs increase…

A: Change in income / Loss = ( Units * Contribution margin ) - Fixed cost

Q: Required information [The following information applies to the questions displayed below.] Data for…

A: The cost volume profit analysis or CVP analysis is used for the purpose of determining the effect on…

Q: Determine the break-even volume in dollars if fixed costs are increased by $40,000, while variable…

A: break even volume = fixed cost amount /pv ratio pv ratio = 1-variable cost ratio pv ratio = 1-0.4…

Q: Use the information below to answer the following question. K-CO Company Summary Income Statement…

A: Break-Even Sales in Dollars = Fixed Cost/Contribution Margin Ratio

Q: The company’s current selling price and variable cost per unit is P60 and 36 respectively. If the…

A: Solution: New Selling price per unit = P60 * 95% = P57 New variable expenses per unit = P36 - P1 =…

Q: D&R Corp. has annual revenues of $262,000, an average contribution margin ratio of 33%, and fixed…

A: Operating income is a measure that shows how much of a company's revenue is transformed into…

Question

100%

Variable costs as a percentage of sales for Lemon Inc. are 77%, current sales are $601,000, and fixed costs are $202,000. How much will operating income change if sales increase by $36,800?

a.$8,464 increase

b.$28,336 decrease

c.$28,336 increase

d.$8,464 decrease

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

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Wallace Industries has total contribution margin of $58,560 and net income of $24,400 for the month of April. Wallace expects sales volume to increase by 5% in May. What are the degree of operating leverage and the expected percent change in income for Wallace Industries? 0.42 and 2.2% 0.42and5% 2.4andl2% 2.Sandl3%
Youngstown Construction plans to discontinue its rooting segment. Last year, this segment generated a contribution margin of $65.000 and incurred $70.000 in fixed costs. Discontinuing the segment will allow the company to avoid half of the fixed costs. What effect is expected to occur to the companys overall profit? A. a decrease of $5,000 B. a decrease of $30,000 C. a decrease of $5,000 D. an increase of $30,000
Company A has current sales of $4,000,000 and a 45% contribution margin. Its fixed costs are $600,000. Company B is a service firm with current service revenue of $2,800,000 and a 15% contribution margin. Company Bs fixed costs are $375,000. Compute the degree of operating leverage for both companies. Which company will benefit most from a 15% increase in sales? Explain why.
Cost-Volume-Profit, Margin of Safety Victoria Company produces a single product. Last years income statement is as follows: Required: 1. Compute the break-even point in units and sales dollars calculated using the break-even units. 2. What was the margin of safety for Victoria last year in sales dollars? 3. Suppose that Victoria is considering an investment in new technology that will increase fixed cost by 250,000 per year but will lower variable costs to 45% of sales. Units sold will remain unchanged. Prepare a budgeted income statement assuming that Victoria makes this investment. What is the new break-even point in sales dollars, assuming that the investment is made?