Bundle: Financial & Managerial Accounting, Loose-leaf Version, 14th + Working Papers For Warren/reeve/duchac's Corporate Financial Accounting, 14th + ... Financial & Managerial Accounting,
14th Edition
ISBN: 9781337802000
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 19, Problem 19.3APR
1.
To determine
Break-even Point: It refers to a point in the level of operations at which a company experiences its revenues generated is equal to its costs incurred. Thus, when a company reaches at its break-even point, it reports neither an income nor a loss from operations. The formula to calculate the break-even point in sales units is as follows:
To compute: the anticipated break-even sales (units).
2.
To determine
the amount of sales (units) if the company desires a target profit of $240,000.
3.
To determine
To construct: a cost-volume-profit chart assuming the sales of 20,000 units within the relevant range.
4.
To determine
the probable income (loss) from operations if sales total 16,000 units.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Break-Even Sales and Cost-Volume-Profit Chart
For the coming year, Cleves Company anticipates a unit selling price of $98, a unit variable cost of $49, and fixed costs of $588,000.
Required:
1. Compute the anticipated break-even sales (units).
units
2. Compute the sales (units) required to realize a target profit of $259,700.
units
3. Construct a cost-volume-profit chart on paper, assuming maximum sales of 24,000 units within the relevant range. From your chart, indicate whether each of the following sales levels would produce a profit, a
loss, or break-even.
$1,646,400
$1,470,000
$1,176,000
$882,000
$705,600
4. Determine the probable operating income (loss) if sales total 19,200 units. If required, use the minus sign to indicate a loss.
Break-Even Sales and Cost-Volume-Profit Chart
For the coming year, Cleves Company anticipates a unit selling price of $92, a unit variable cost of $46, and fixed costs of $299,000.
Required:
1. Compute the anticipated break-even sales (units).
units
2. Compute the sales (units) required to realize a target profit of $138,000.
units
3. Construct a cost-volume-profit chart on paper, assuming maximum sales of 13,000 units within the relevant range. From your chart, indicate
whether each of the following sales levels would produce a profit, a loss, or break-even.
$837,200
Profit
$745,200
Profit
$598,000
Break-even
$450,800
Loss
Loss
$358,800
4. Determine the probable operating income (loss) if sales total 10,400 units. If required, use the minus sign to indicate a loss.
Income
For the coming year, Cleves Company anticipates a unit selling price of $142, a unit variable cost of $71, and fixed costs of $603,500.
Required:
1. Compute the anticipated break-even sales (units).fill in the blank 1 units
2. Compute the sales (units) required to realize a target profit of $298,200.fill in the blank 2 units
3. Construct a cost-volume-profit chart, assuming maximum sales of 17,000 units within the relevant range. From your chart, indicate whether each of the following sales levels would produce a profit, a loss, or break-even.
$1,689,800
$1,505,200
$1,207,000
$908,800
$724,200
4. Determine the probable income (loss) from operations if sales total 13,600 units. If required, use the minus sign to indicate a loss.$fill in the blank 8
Chapter 19 Solutions
Bundle: Financial & Managerial Accounting, Loose-leaf Version, 14th + Working Papers For Warren/reeve/duchac's Corporate Financial Accounting, 14th + ... Financial & Managerial Accounting,
Ch. 19 - Describe how total variable costs and unit...Ch. 19 - Which of the following costs would be classified...Ch. 19 - Describe how total fixed costs and unit fixed...Ch. 19 - In applying the high-low method of cost estimation...Ch. 19 - If fixed costs increase, what would be the impact...Ch. 19 - Prob. 6DQCh. 19 - If the unit cost of direct materials is decreased,...Ch. 19 - Both Austin Company and Hill Company had the same...Ch. 19 - Prob. 9DQCh. 19 - Prob. 10DQ
Ch. 19 - High-low method The manufacturing costs of...Ch. 19 - Contribution margin Lanning Company sells 160,000...Ch. 19 - Prob. 19.3BECh. 19 - Prob. 19.4BECh. 19 - Prob. 19.5BECh. 19 - Prob. 19.6BECh. 19 - Margin of safety Liu Company has sales of...Ch. 19 - Classify costs Following is a list of various...Ch. 19 - Identify cost graphs The following cost graphs...Ch. 19 - Prob. 19.3EXCh. 19 - Identify activity bases From the following list of...Ch. 19 - Identify fixed and variable costs Intuit Inc....Ch. 19 - Prob. 19.6EXCh. 19 - High-low method Ziegler Inc. has decided to use...Ch. 19 - High-low method for a service company Boston...Ch. 19 - Contribution margin ratio A. Young Company budgets...Ch. 19 - Contribution margin and contribution margin ratio...Ch. 19 - Prob. 19.11EXCh. 19 - Prob. 19.12EXCh. 19 - Break-even sales Currently, the unit selling price...Ch. 19 - Prob. 19.14EXCh. 19 - Prob. 19.15EXCh. 19 - Break even analysis for a service company Sprint...Ch. 19 - Prob. 19.17EXCh. 19 - Prob. 19.18EXCh. 19 - Prob. 19.19EXCh. 19 - Prob. 19.20EXCh. 19 - Prob. 19.21EXCh. 19 - Break-even sales and sales mix for a service...Ch. 19 - Margin of safety A. If Canace Company, with a...Ch. 19 - Prob. 19.24EXCh. 19 - Operating leverage Beck Inc. and Bryant Inc. have...Ch. 19 - Classify costs Seymour Clothing Co. manufactures a...Ch. 19 - Break-even sales under present and proposed...Ch. 19 - Prob. 19.3APRCh. 19 - Prob. 19.4APRCh. 19 - Prob. 19.5APRCh. 19 - Contribution margin, break even sales,...Ch. 19 - Classify costs Cromwell Furniture Company...Ch. 19 - Prob. 19.2BPRCh. 19 - Break even sales and cost-volume-profit chart For...Ch. 19 - Prob. 19.4BPRCh. 19 - Sales mix and break even sales Data related to the...Ch. 19 - Prob. 19.6BPRCh. 19 - Prob. 1ADMCh. 19 - Break-even subscribers for a video service Star...Ch. 19 - Prob. 3ADMCh. 19 - Prob. 19.1TIFCh. 19 - Prob. 19.3TIF
Knowledge Booster
Similar questions
- 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?arrow_forwardKlamath Company produces a single product. The projected income statement for the coming year is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. 2. Suppose 10,000 units are sold above break-even. What is the operating income? 3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue. (Note: Round the contribution margin ratio to four decimal places, and round the sales revenue to the nearest dollar.) Suppose that revenues are 200,000 more than expected for the coming year. What would the total operating income be?arrow_forwardSuppose a company finds that shipping cost is 3,560 each month plus 6.70 per package shipped. What is the cost formula for monthly shipping cost? Identify the independent variable, the dependent variable, the fixed cost per month, and the variable rate.arrow_forward
- More-Power Company has projected sales of 75,000 regular sanders and 30,000 mini-sanders for next year. The projected income statement is as follows: Required: 1. Set up the given income statement on a spreadsheet (e.g., ExcelTM). Then, substitute the following sales mixes, and calculate operating income. Be sure to print the results for each sales mix (a through d). 2. Calculate the break-even units for each product for each of the preceding sales mixes.arrow_forwardSales 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.arrow_forwardBreak-Even Sales and Cost-Volume-Profit Chart For the coming year, Cleves Company anticipates a unit selling price of $100, a unit variable cost of $60, and fixed costs of $480,000. Required: 1. Compute the anticipated break-even sales in units.arrow_forward
- For the coming year, Cleves Company anticipates a unit selling price of $134, a unit variable cost of $67, and fixed costs of $529,300. Required: 1. Compute the anticipated break-even sales (units). units 2. Compute the sales (units) required to realize a target profit of $281,400. units 3. Construct a cost-volume-profit chart on paper, assuming maximum sales of 15,800 units within the relevant range. From your chart, indicate whether each of the following sales levels would produce a profit, a loss, or break-even. $1,487,400 Profit $1,326,600 Profit $1,058,600 Break-even $790,600 Loss $629,800 Loss 4. Determine the probable operating income (loss) if sales total 12,600 units. If required, use the minus sign to indicate a loss.$ Incomearrow_forwardFor the coming year, Cleves Company anticipates a unit selling price of $100, a unit variable cost of $60, and fixed costs of $480,000. Instructions 1. Compute the anticipated break even sales (units) 2. Compute the sales (units) required to realize a target profit of $240,000 3. Construct a cost volume profit chart, assuming maximum sales of 20,000 units within the relevant range 4. Determine the probable income (loss) from operations if sales total 16,000 unitsarrow_forwardFor the coming year, Loudermilk Inc. anticipates fixed costs of $600,000, a unit variable cost of $75, and a unit selling price of $125. The maximum sales within the relevant range are $2,500,000. a. Construct a cost-volume-profit chart on a sheet of paper. Indicate whether each of the following levels of sales (units or dollars) is in the operating profit area, operating loss area, or at the break-even point. 4,800 units Operating Loss Area 12,000 units Operating Profit Area $1,500,000 Operating Profit Area 20,000 units Operating Profit Area $2,500,000 Operating Profit Area b. Estimate the break-even sales (dollars) by using the cost-volume-profit chart constructed in part (a).$1,500,000 c. The graphic format permits the user to visually determine the ? and the ? for any given level of ? .arrow_forward
- For the coming year, Cleves Company anticipates a unit selling price of $80, a unit variabie cost of $40, and fixed costs of $248,000. Required: 1. Compute the anticipated break-even sales (units). units 2. Compute the sales (units) required to realize a target profit of $96,000. unitsarrow_forwardебоок Break-even sales and cost-volume-profit chart For the coming year, Cleves Company anticipates a unit selling price of $134, a unit variable cost of $67, and fixed costs of $629,800. Required: 1. Compute the anticipated break-even sales (units). units 2. Compute the sales (units) required to realize a target profit of $341,700. units 3. Construct a cost-volume-profit chart on paper, assuming maximum sales of 18,800 units within the relevant range. From your chart, indicate whether each of following sales levels would produce a profit, a loss, or break-even. $1,768,800 $1,581,200 $1,259,600 $951,400 $750,400 4. Determine the probable operating income (loss) if sales total 15,000 units. If required, use the minus sign to indicate a loss.arrow_forwardFor the coming year, Cleves Company anticipates a unit selling price of $80, a unit variable cost of $40, and fixed costs of $248,000. Required: 1. Compute the anticipated break-even sales (units). units 2. Compute the sales (units) required to realize a target profit of $96,000. unitsarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,