Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
6th Edition
ISBN: 9780134486857
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 20, Problem 14SE
Refer to the original information (ignoring the changes considered in Short Exercises S20-12 and S20-13). If Funday Park expects to sell 8,100 tickets, compute the margin of safety in tickets and in sales dollars.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Sanchez, Incorporated, is considering a change in its cash-only sales policy. The new terms of sale would be net one month. The required return is 1.7 percent per month.
Current Policy
New Policy
Price per unit
$ 700
$ 700
Cost per unit
$ 420
$ 420
Unit sales per month
1,120
1,220
Based on the above information, determine the NPV of the new policy.
The manager of a tourist attraction is considering whether to open on 1 January, a day when the attraction has, in previous years, been closed. The attraction has a daily capacity of 1,000 visitors. If the attraction opens for business on that day it will incur additional specific fixed costs of $30,000.
The contribution from the sale of tickets would be $25 per visitor. The number of visitors is uncertain but based on past experience it is expected to be as follows:
Number of Visitors
Probability
800 visitors
50%
900 visitors
30%
1,000 visitors
20%
It is expected that visitors will also purchase souvenirs and refreshments. The contribution which would be made from these sales has been estimated as follows:
Spending per Visitors
Probability
$8 per visitor
35%
$10 per visitor
40%
$12 per visitor
25%
Required:
Calculate whether it is worthwhile opening the tourist attraction on 1 January. You should use expected value as the basis…
Given the above information in Q1, Shannon’s wants to increase its sales to retailers by 20% in the next year. Management estimates that the incremental promotion program required to generate sufficient demand to boost sales by 20% will be:
Personal Selling Costs
$ 60,000 (exclusive of commission)
Consumer Advertising
$ 58,296
Trade Promotion
$ 41,369
Sales Promotion
$ 25,000
Shannon’s will need to hire an additional sales person (paid a salary and commission) and provide some added administrative support. The sales person’s salary plus administrative support will cost about $60,000 per year. The sales person’s commission will be the equivalent of $0.05 per six pack sold. The incremental costs of consumer advertising, trade promotion, and sales promotion necessary to support sales in the new market will be substantial as indicated in the table above. How many six packs must be sold to break-even on the incremental costs that…
Chapter 20 Solutions
Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
Ch. 20 - Following is a list of costs for a furniture...Ch. 20 - Following is a list of costs for a furniture...Ch. 20 - Prob. 3TICh. 20 - Following is a list of costs for a furniture...Ch. 20 - Following is a list of costs for a furniture...Ch. 20 - Prob. 6TICh. 20 - Prob. 7TICh. 20 - Prob. 8TICh. 20 - Prob. 9TICh. 20 - Prob. 10TI
Ch. 20 - Prob. 11TICh. 20 - Prob. 12TICh. 20 - Prob. 13TICh. 20 - Prob. 14TICh. 20 - Prob. 15TICh. 20 - Prob. 16TICh. 20 - Prob. 17TICh. 20 - Prob. 18TICh. 20 - A furniture manufacturer specializes in wood...Ch. 20 - For Franks Funky Sounds, straight-line...Ch. 20 - Assume Intervale Railway is considering hiring a...Ch. 20 - If Intervale Railways fixed costs total 90,000 per...Ch. 20 - If Intervale Railways fixed costs total 90,000 per...Ch. 20 - If Intervale Railways fixed costs total 90,000 per...Ch. 20 - On a CVP graph, the total cost line intersects the...Ch. 20 - If a company increases its sales price per unit...Ch. 20 - If a company increases its fixed costs for Product...Ch. 20 - Prob. 9QCCh. 20 - Rocky Mountain Waterpark sells half of its tickets...Ch. 20 - What is a variable cost? Give an example.Ch. 20 - What is a fixed cost? Give an example.Ch. 20 - What is a mixed cost? Give an example.Ch. 20 - What is the purpose of using the high-low method?Ch. 20 - Describe the three steps of the high-low method.Ch. 20 - Prob. 6RQCh. 20 - Prob. 7RQCh. 20 - Prob. 8RQCh. 20 - Prob. 9RQCh. 20 - What are the three ways contribution margin can be...Ch. 20 - Prob. 11RQCh. 20 - What is cost-volume-profit analysis?Ch. 20 - What are the CVP assumptions?Ch. 20 - What is the breakeven point?Ch. 20 - Prob. 15RQCh. 20 - Prob. 16RQCh. 20 - Prob. 17RQCh. 20 - Why is the calculation to determine the target...Ch. 20 - Prob. 19RQCh. 20 - What is sensitivity analysis? How do managers use...Ch. 20 - What effect does an increase in sales price have...Ch. 20 - Prob. 22RQCh. 20 - What is the margin of safety? What are the three...Ch. 20 - What is a companys cost structure? How can cost...Ch. 20 - What is operating leverage? What does it mean if a...Ch. 20 - Prob. 26RQCh. 20 - Philadelphia Acoustics builds innovative speakers...Ch. 20 - Hollys Day Care has been in operation for several...Ch. 20 - Mark owns a machine shop. In reviewing the shops...Ch. 20 - Glenn Company sells a product for 80 per unit....Ch. 20 - Gabelman Company sells a product for 95 per unit....Ch. 20 - Mackler, Inc. sells a product with a contribution...Ch. 20 - Ocean Company sells a product with a contribution...Ch. 20 - Compute the missing amounts for the following...Ch. 20 - Compute the missing amounts for the following...Ch. 20 - Use the following information to complete Short...Ch. 20 - Compute Funday Parks contribution margin ratio....Ch. 20 - Using the Funday Park information presented, do...Ch. 20 - Prob. 13SECh. 20 - Refer to the original information (ignoring the...Ch. 20 - Refer to the original information (ignoring the...Ch. 20 - Prob. 16SECh. 20 - For 2019, Wild Waters expects a sales mix of four...Ch. 20 - Match the following terms with the correct...Ch. 20 - Identify each cost as variable (V), fixed (F), or...Ch. 20 - For each total fixed cost listed below, determine...Ch. 20 - Prob. 21ECh. 20 - Prob. 22ECh. 20 - The manager of Trusty Car Inspection reviewed the...Ch. 20 - For its top managers, Worldwide Travel formats its...Ch. 20 - Complete the table below for contribution margin...Ch. 20 - Prob. 26ECh. 20 - Prob. 27ECh. 20 - Owner Shan Mu is considering franchising her...Ch. 20 - Prob. 29ECh. 20 - Prob. 30ECh. 20 - Determine how each change effects the elements of...Ch. 20 - Mi Tierra Driving School charges 680 per student...Ch. 20 - Prob. 33ECh. 20 - Robbies Repair Shop has a monthly target profit of...Ch. 20 - Prob. 35ECh. 20 - Prob. 36ECh. 20 - The budgets of four companies yield the following...Ch. 20 - England Productions performs London shows. The...Ch. 20 - Crandall Company sells flags with team logos....Ch. 20 - Prob. 40APCh. 20 - The contribution margin income statement of Sugar...Ch. 20 - The budgets of four companies yield the following...Ch. 20 - Famous Productions performs London shows. The...Ch. 20 - White Company sells flags with team logos. White...Ch. 20 - Diversified Investor Group is opening an office in...Ch. 20 - The contribution margin income statement of...Ch. 20 - Prob. 48PCh. 20 - The Jacksonville Shirt Company makes two types of...Ch. 20 - Prob. 1TIATCCh. 20 - Steve and Linda Hom live in Bartlesville,...Ch. 20 - Prob. 1EI
Additional Business Textbook Solutions
Find more solutions based on key concepts
Fundamental and Enhancing Characteristics. Identify whether the following items are fundamental characteristics...
Intermediate Accounting
List five asset accounts, three liability accounts, and five expense accounts included in the acquisition and p...
Auditing And Assurance Services
18. What is the calculation for return on assets (ROA)? Explain what ROA measures.
Horngren's Financial & Managerial Accounting, The Financial Chapters (6th Edition)
Adjusting Journal Entries; Adjusted Trial Balance. Magic Cleaning Services (MCS) has a fiscal year-end of Decem...
Intermediate Accounting (2nd Edition)
Bank loan; accrued interest LO132 On October 1, Eder Fabrication borrowed 60 million and issued a nine-month, ...
INTERMEDIATE ACCOUNTING
This year, Prewer Inc. received a 160,000 dividend on its investment consisting of 16 percent of the outstandin...
PRINCIPLES OF TAXATION F/BUS.+INVEST.
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
- The manager of an automobile dealership is considering a new bonus plan designed to increase sales volume. Currently, the mean sales volume is 14 automobiles per month. The manager wants to conduct a research study to see whether the new bonus plan increases sales volume. To collect data on the plan, a sample of sales personnel will be allowed to sell under the new bonus plan for a one-month period. a. Develop the null and alternative hypotheses most appropriate for this situation. b. Comment on the conclusion when H0 cannot be rejected. c. Comment on the conclusion when H0 can be rejected.arrow_forwardThe Port Authority sells a wide variety of cables and adapters for electronic equipment online. Last year the mean value of orders placed with the Port Authority was 47.28, and management wants to assess whether the mean value of orders placed to date this year is the same as last year. The values of a sample of 49,896 orders placed this year are collected and recorded in the tile PortAuthority. a. Formulate hypotheses that can be used to test whether the mean value of orders placed this year differs from the mean value of orders placed last year. b. Use the data in the file PortAuthority to conduct your hypothesis test. What is the p value for your hypothesis test? At = 0.01, what is your conclusion?arrow_forwardMoses Moonrocks Inc. has developed a balanced scorecard with a measure map that suggests that the number of erroneous shipments has a direct effect on operating profit. The company estimates that every shipment error leads to a reduction of revenue by 3,000 and increased costs of about 2,000. If the company has the following budgeted sales and costs for next month (without accounting for any possible shipping errors), determine how many shipping errors the company can afford to have and still break even:arrow_forward
- After conducting a market research study, Magnificent Manufacturing decided to produce a new interior door to complement its exterior door line. It is estimated that the new interior door can be sold at a target price of $270. The annual target sales volume for interior doors is 29,000. Magnificent has target operating income of 40% of sales. What are target sales revenues? A. $4,698,000 B. $3,132,000 C. $10,962,000 D. $7,830,000arrow_forwardA garage band wants to hold a concert. The expected crowd is 2,100. The average expenditure on concessions is $35. Tickets sell for $30 each, and the band's profit is 85% of the gate and concession sales minus a fixed cost of $20,000. Develop a mathematical model and implement it on a spreadsheet to find the band's expected profit.arrow_forwardStubs-R-Us is a local event ticket broker. Last year, the company sold 760,000 tickets with an average commission of $10. Because of the general economic climate, Stubs expects ticket volume to decline by 20 percent. In addition, employees at a local insurance company headquarters accounted for 5 percent of Stubs’ volume. The headquarters relocated to another state and all the employees closed their accounts. Offsetting these factors is the observation that the average commission per sale is likely to increase by 15 percent because the average ticket prices are expected to be larger in the coming year. Required: Estimate commission revenues for Stubs-R-Us for the coming year.arrow_forward
- Will Lagoon achieve its target operating income of 35% of revenues at ticket prices of $35 per ticket before any operating changes?arrow_forwardUsing (a) the regression equation and (b) the high-low equation, what is the increase in revenues for each $10,000 spent on promotional costs within the relevant range? Which method should Catherine use to predict the effect of promotional costs on ticket revenues? Explain briefly.arrow_forwardAn airport Baggage Handing Department has evaluated two proposals for baggage delivery conveyor systems. A present worth analysis at i = 15% per year of estimated revenues and costs resulted in PWA = $460,000 and PWB = $395,000. In addition to this economic measure, three more attributes were independently assigned a relative importance score from 0 to 100 by the department manager and a senior team supervisor. Importance Scores Attribute Manager Supervisor 1. Economics 80 25 2. Durability 35 80 3. Safety 30 100 4. Maintainability 20 90 Separately, you have used the four attributes to value rate the two proposals on a scale of 0 to 1.0 as shown in the following table. (The economics attribute was rated using the PW values.) Value Rating Attribute Proposal A Proposal B 1. Economics 1.00 0.90 2. Durability 0.35 0.50 3. Safety 1.00 0.20 4. Maintainability 0.25 1.00 Select the better proposal using each of the following methods: (a) Weighted evaluation of the department manager (b)…arrow_forward
- After reading through the information I'm a little confused on a few of the equations and why and where they pull info from each of the answers. After reading through the problem the three things needed are: A. Operating Income (annual) for the new WSM service? B1. What annual operating income can WSM expect from adopting Internet ticket sales? (More info is in the picture attached in the b-1. section) C. Ignoring the information in requirement (b), how many discounted tickets would WSM have to sell annually to earn an operating income of $4,800,000? Assume that the annual number of flights remains at 1,400 and that the discounted tickets would be evenly divided across the 1,400 flights.arrow_forwardUse the following information to complete Short Exercises S20-16 and S20-17. Wild Waters Swim Park sells individual and family tickets. With a ticket, each person receives a meal, three beverages, and unlimited use of the swimming pools. Wild Water's has the following ticket prices and variable costs for 2018: Wild Waters expects to sell one individual ticket for every four family tickets. Wild Waters’s total fixed costs are $27,500. Calculating breakeven point for two products For 2019, Wild Waters expects a sales mix of four individual tickets for every one family ticket. Requirements Compute the new weighted-average contribution margin per ticket. Calculate the total number of tickets Wild Waters must sell to break even. Calculate the number of individual tickets and the number of family tickets the company must sell to break even.arrow_forwardWild-Water Works Water Park provides for a fun day by offering a variety of rides. Wild-Water Works Water Park sells tickets at $74 per person as a one-day entrance fee. Variable costs per person are $34 and fixed cost amount to $222,300 per month.Wild-Water Works Water Park expects to sell 7,900 tickets. Find break-even first, then compute the margin of safety in tickets and sales in dollars.arrow_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
Essentials of Business Analytics (MindTap Course ...StatisticsISBN:9781305627734Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. AndersonPublisher:Cengage Learning
Excel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Essentials of Business Analytics (MindTap Course ...
Statistics
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Cengage Learning
Excel Applications for Accounting Principles
Accounting
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Cengage Learning
HR Basics: Compensation; Author: HR Basics: Compensation;https://www.youtube.com/watch?v=wZoRId6ADuo;License: Standard Youtube License