Whirly Corporation's contribution format income statement for the most recent month is shown below: Per Unit $ 30.00 20.00 $10.00 Sales (8,200 units) Variable expenses Contribution margin Fixed expenses. Net operating income. Required: (Consider each case independently): Total $ 246,000 164,000 1. Revised net operating income 2. Revised net operating income 3. Revised net operating income 82,000 55,500 $ 26,500 1. What would be the revised net operating income per month if the sales volume increases by 50 units? 2. What would be the revised net operating income per month if the sales volume decreases by 50 units? 3. What would be the revised net operating income per month if the sales volume is 7,200 units?

Whirly Corporation's contribution format income statement for the most recent month is shown below: Per Unit $ 30.00 20.00 $10.00 Sales (8,200 units) Variable expenses Contribution margin Fixed expenses. Net operating income. Required: (Consider each case independently): Total $ 246,000 164,000 1. Revised net operating income 2. Revised net operating income 3. Revised net operating income 82,000 55,500 $ 26,500 1. What would be the revised net operating income per month if the sales volume increases by 50 units? 2. What would be the revised net operating income per month if the sales volume decreases by 50 units? 3. What would be the revised net operating income per month if the sales volume is 7,200 units?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter8: Tactical Decision-making And Relevant Analysis

Section: Chapter Questions

Problem 11MCQ: Garrett Company provided the following information: Common fixed cost totaled 46,000. Garrett...

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Use the following information for Multiple-Choice Questions 2-13 through 2-18: Last year, Barnard Company incurred the following costs: Barnard produced and sold 10,000 units at a price of 31 each. 2-17 Refer to the information for Barnard Company on the previous page. The total period expense is a. 276,000. b. 200,000. c. 76,000. d. 40,000. e. 36,000.
Utilization rate Delta Air Lines (DAL) reported the following data (in millions) for three recent years. Delta refers to its utilization rates as passenger load factor. Compute the passenger load factor (utilization rate) for each year.
Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Refer to Exercise 2.21. Last calendar year, Ellerson recognized revenue of 1,312,000 and had selling and administrative expenses of 204,600. Required: 1. What is the cost of goods sold for last year? 2. Prepare an income statement for Ellerson for last year.
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.
Starling Co. manufactures one product with a selling price of 18 and variable cost of 12. Starlings total annual fixed costs are 38,400. If operating income last year was 28,800, what was the number of units Starling sold? a. 4,800 b. 6,400 c. 5,600 d. 11,200
*CAN YOU ANSWER PARTS 4-7* The contribution format income statement for Huerra Company for last year is given below: Total Unit Sales $ 992,000 $ 49.60 Variable expenses 595,200 29.76 Contribution margin 396,800 19.84 Fixed expenses 318,800 15.94 Net operating income 78,000 3.90 Income taxes @ 40% 31,200 1.56 Net income $ 46,800 $ 2.34 The company had average operating assets of $492,000 during the year. Required: 1. Compute the company’s return on investment (ROI) for the period using the ROI formula stated in terms of margin and turnover. For each of the following questions, indicate whether the margin and turnover will increase, decrease, or remain unchanged as a result of the events described, and then compute the new ROI figure. Consider each question separately, starting in each case from the data used to compute the original ROI in (1) above. 2. Using Lean Production, the company is able to reduce the average level of…
The contribution format income statement for Huerra Company for last year is given below: Total Unit Sales $ 4,000,000 $ 80.00 Variable expenses 2,800,000 56.00 Contribution margin 1,200,000 24.00 Fixed expenses 840,000 16.80 Net operating income 360,000 7.20 Income taxes @ 30% 108,000 2.16 Net income $ 252,000 $ 5.04 The company had average operating assets of $2,000,000 during the year. At the beginning of the year, the company uses $200,000 of cash (received on accounts receivable) to repurchase and retire some of its common stock Effect Margin ____ % ____ Turnover ____ ____ ROI ____ % ____
The contribution format income statement for Huerra Company for last year is given below: Total Unit Sales $ 4,000,000 $ 80.00 Variable expenses 2,800,000 56.00 Contribution margin 1,200,000 24.00 Fixed expenses 840,000 16.80 Net operating income 360,000 7.20 Income taxes @ 30% 108,000 2.16 Net income $ 252,000 $ 5.04 The company had average operating assets of $2,000,000 during the year. At the beginning of the year, the company uses $200,000 of cash (received on accounts receivable) to repurchase and retire some of its common stock At the beginning of the year, the company uses $200,000 of cash (received on accounts receivable) to repurchase and retire some of its common stock. (Round your intermediate calculations and final answers to 2 decimal places.) Effect Margin 6.30selected answer incorrect % not attempted Turnover 2.00selected answer incorrect not attempted ROI 12.60selected…
Miller Company’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (25,200 units) $ 226,800 $ 9.00 Variable expenses 136,080 5.40 Contribution margin 90,720 $ 3.60 Fixed expenses 52,920 Net operating income $ 37,800 Required: (Consider each of the four requirements independently): Assume the sales volume increases by 4,032 units: What is the revised net operating income? What is the percent increase in unit sales? Using the most recent month’s degree of operating leverage, what is the percent increase in net operating income? What is the revised net operating income if the selling price decreases by $1.20 per unit and the number of units sold increases by 24%? What is the revised net operating income if the selling price increases by $1.20 per unit, fixed expenses increase by $10,000, and the number of units sold decreases by 8%? What is the revised net operating income if the selling price per unit increases…
The contribution format income statement for Huerra Company for last year is given below: Total Unit Sales $ 1,006,000 $ 50.30 Variable expenses 603,600 30.18 Contribution margin 402,400 20.12 Fixed expenses 324,400 16.22 Net operating income 78,000 3.90 Income taxes @ 40% 31,200 1.56 Net income $ 46,800 $ 2.34 The company had average operating assets of $508,000 during the year. Required: 1. Compute the company’s margin, turnover, and return on investment (ROI) for the period. For each of the following questions, indicate whether the margin and turnover will increase, decrease, or remain unchanged as a result of the events described, and then compute the new ROI figure. Consider each question separately, starting in each case from the data used to compute the original ROI in (1) above. 2. Using Lean Production, the company is able to reduce the average level of inventory by $91,000. 3. The company achieves a cost savings of $6,000 per year by using less…
The contribution format income statement for Huerra Company for last year is given below: Total Unit Sales $ 1,006,000 $ 50.30 Variable expenses 603,600 30.18 Contribution margin 402,400 20.12 Fixed expenses 324,400 16.22 Net operating income 78,000 3.90 Income taxes @ 40% 31,200 1.56 Net income $ 46,800 $ 2.34 The company had average operating assets of $508,000 during the year. Required: 1. Compute the company’s margin, turnover, and return on investment (ROI) for the period. For each of the following questions, indicate whether the margin and turnover will increase, decrease, or remain unchanged as a result of the events described, and then compute the new ROI figure. Consider each question separately, starting in each case from the data used to compute the original ROI in (1) above. 2. Using Lean Production, the company is able to reduce the average level of inventory by $91,000. 3. The company achieves a cost savings of $6,000 per year by using less…
Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales$ 55,000Variable expenses33,000Contribution margin22,000Fixed expenses14,960Net operating income$ 7,04015. Assume that the amounts of the company’s total variable expenses and total fixed expenses were reversed. In other words, assume that the total variable expenses are $14,960 and the total fixed expenses are $33,000. Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in unit sales? (Round your intermediate calculations and final answer to 2 decimal places.)