EBK CORNERSTONES OF COST MANAGEMENT
3rd Edition
ISBN: 8220100474972
Author: MOWEN
Publisher: CENGAGE L
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Chapter 16, Problem 28E
To determine
Identify the contribution margin.
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Students have asked these similar questions
If the contribution margin ratio for France Company is 34%, sales were $424,000, and fixed costs were $100,000, what was the income from operations?
a.$44,160
b.$100,000
c.$35,328
d.$144,160
A company has return on sales of 15% at sales of $400,000. Its fixed cost are $90,000; variable costs are $25 per unit.
A. What are sales in units? Why? How?
B. What is contribution margin per unit? Why? How?
C. What is income? Why? How?
A company with a break-even point at $900,000 in sales revenue had fixed costs of $225,000. When actual sales were $1,000,000, variable costs were
$750,000. Determine the following:
Round your percentage answers to the nearest whole number.
a. Margin of safety expressed in dollars
b. Margin of safety expressed as a
percentage of sales
c. Contribution margin ratio
d. Operating income
%
%
Chapter 16 Solutions
EBK CORNERSTONES OF COST MANAGEMENT
Ch. 16 - Prob. 1DQCh. 16 - Describe the difference between the units-sold...Ch. 16 - Define the term break-even point.Ch. 16 - Explain why contribution margin per unit becomes...Ch. 16 - A restaurant owner who had yet to earn a monthly...Ch. 16 - What is the variable cost ratio? The contribution...Ch. 16 - Prob. 7DQCh. 16 - Suppose a firm with a contribution margin ratio of...Ch. 16 - Prob. 9DQCh. 16 - Explain how CVP analysis developed for single...
Ch. 16 - Prob. 11DQCh. 16 - How do income taxes affect the break-even point...Ch. 16 - Explain how a change in sales mix can change a...Ch. 16 - Explain how a change in sales mix can change a...Ch. 16 - Prob. 15DQCh. 16 - Prob. 1CECh. 16 - Prob. 2CECh. 16 - Health-Temp Company is a placement agency for...Ch. 16 - Olivian Company wants to earn 420,000 in net...Ch. 16 - Vandenberg, Inc., produces and sells two products:...Ch. 16 - Prob. 6CECh. 16 - Prob. 7CECh. 16 - Prob. 8ECh. 16 - Gelbart Company manufactures gas grills. Fixed...Ch. 16 - Schylar Pharmaceuticals, Inc., plans to sell...Ch. 16 - Prob. 11ECh. 16 - Prob. 12ECh. 16 - Big Red Motors, Inc., employs 15 sales personnel...Ch. 16 - Sports-Reps, Inc., represents professional...Ch. 16 - Campbell Company manufactures and sells adjustable...Ch. 16 - Prob. 16ECh. 16 - Sara Pacheco is a sophomore in college and earns a...Ch. 16 - Carmichael Corporation is in the process of...Ch. 16 - Choose the best answer for each of the following...Ch. 16 - Prob. 20ECh. 16 - Income statements for two different companies in...Ch. 16 - Prob. 22ECh. 16 - Prob. 23ECh. 16 - Busy-Bee Baking Company produces a variety of...Ch. 16 - Prob. 25ECh. 16 - Prob. 26ECh. 16 - Prob. 27ECh. 16 - Prob. 28ECh. 16 - Prob. 29ECh. 16 - Prob. 30ECh. 16 - Prob. 31PCh. 16 - More-Power Company has projected sales of 75,000...Ch. 16 - Consider the following information on four...Ch. 16 - Hammond Company runs a driving range and golf...Ch. 16 - Prob. 35PCh. 16 - Faldo Company produces a single product. The...Ch. 16 - Katayama Company produces a variety of products....Ch. 16 - Prob. 38PCh. 16 - Prob. 39PCh. 16 - Prob. 40PCh. 16 - Salem Electronics currently produces two products:...Ch. 16 - Good Scent, Inc., produces two colognes: Rose and...
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- Raines Company's sales are $940,000 with operating profits of $168,000. If the contribution margin ratio is 40%, what did the fixed costs amount to? Multiple Choice $408,000. $376,000. $308,000. $208,000arrow_forwarda. Coastal Company budgets sales of $1,070,000, fixed costs of $55,400, and variable costs of $246,100. What is the contribution margin ratio for Coastal Company? % b. If the contribution margin ratio for Bushner Company is 50%, sales were $517,000, and fixed costs were $204,220, what was the operating income?arrow_forward10. Louise Corp. has a contribution margin ratio of 31%, fixed costs of $62,000, and a profit of $41,850. What are total sales? a. $335,000 b. $103,850 c. $32,194 d. $191,429arrow_forward
- Howell CompanyBelow is an income statement for Howell Company: Sales $600,000 Variable costs (150,000) Contribution margin $450,000 Fixed costs (300,000) Profit before taxes $150,000 Refer to Howell Company. What was Howell’s margin of safety? Select one: a. $150,000 b. $200,000 c. $300,000 d. $175,000arrow_forward3. A company requires $1,360,000 in sales to meet its net income target. Its contribution margin is 30%, and fixed costs are $240,000. What is the target net income? a. $168,000 b. $408,000 C. $312,000 d. $560,000 4. Housarrow_forwardLauder Company had fixed costs of $282,500, variable costs of $645,000, and actual sales amounted to $1,100,000. If the company has a break-even point at $750,000 in sales revenue. a. Determine the margin of safety expressed in dollars.$fill in the blank 1 b. Determine the margin of safety expressed as a percentage of sales. Enter the percentage amount as a whole number (for example, enter 10% as "10").fill in the blank 2 % c. Determine the contribution margin ratio.fill in the blank 3 % d. Determine the operating income.$fill in the blank 4arrow_forward
- A company has sales of $1,000,000, variable costs of $250,000, and fixed costs of $600,000. Compute the following: 1. Contribution margin ratio. 2. Break-even sales volume. 3. Margin of safety ratio. 4. Net operating income percentage.arrow_forwardThe following data pertain to W Company's two products: Product X Product Y Sales in Rands ........ R100 000 R80 000 Contribution margin ratio 48% 30% If fixed expenses for the company as a whole are R60 000 and the product mix is constant, the overall break-even point for the company would be: A. R150 000. B. R100 000. C. R153 846. D. R132 000.arrow_forwardIf a business had sales of $4,369,000 and a margin of safety of 20%, the break-even point was a.$3,495,200 b.$873,800 c.$7,864,200 d.$5,242,800arrow_forward
- Howell CompanyBelow is an income statement for Howell Company: Sales $600,000 Variable costs (150,000) Contribution margin $450,000 Fixed costs (300,000) Profit before taxes $150,000 Refer to Howell Company. Based on the cost and revenue structure on the income statement, what was Howell’s break-even point in dollars? Select one: a. $425,000 b. $300,000 c. $450,000 d. $400,000arrow_forward8. A company has return on sales of 20%, income of $50,000, selling price of $10, and a contribution margin of 40%.A. What are fixed costs?B. What are variable costs per units?C. What are sales in units?D. What are sales in dollars? *arrow_forward2. Use this information to answer questions: Fixed Expenses Rent $ 44,000 Utilities $ 40,000 Depreciation $6,500 Variable Expenses Cost of Goods Sold 34% of sales Sales Commissions 15% of sales a. What is the company's contribution margin percentage? b. What is the break-even point in dollars? c. If the company wants to earn a profit of $35,000 instead of breaking even, what is the amount of sales the company must achieve?arrow_forward
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