1.
Calculate the total fixed costs and the total variable costs for the current year.
2(a)
Calculate the unit variable cost for the current year.
2(b)
Calculate the unit contribution margin for the current year.
3.
Compute the break-even sales (units) for the current year.
4.
Compute the break-even sales (units) under the proposed program for the following year.
5.
Calculate the amount of sales (units) if the company desires a target profit of $60,000,000.
6.
Calculate the maximum operating income possible with the expanded plant.
7.
Calculate the operating income or loss for the following year, if the proposal is accepted and the sales remains same.
8.
Explain whether to recommend for accepting the proposal.
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Chapter 20 Solutions
Financial And Managerial Accounting
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- Gelbart Company manufactures gas grills. Fixed costs amount to 16,335,000 per year. Variable costs per gas grill are 225, and the average price per gas grill is 600. Required: 1. How many gas grills must Gelbart Company sell to break even? 2. If Gelbart Company sells 46,775 gas grills in a year, what is the operating income? 3. If Gelbart Companys variable costs increase to 240 per grill while the price and fixed costs remain unchanged, what is the new break-even point?arrow_forwardBolger and Co. manufactures large gaskets for the turbine industry. Bolgers per-unit sales price and variable costs for the current year are as follows: Bolgers total fixed costs aggregate to 360,000. Bolgers labor agreement is expiring at the end of the year, and management is concerned about the effects of a new labor agreement on its break-even point in units. The controller performed a sensitivity analysis to ascertain the estimated effect of a 10-per-unit direct labor increase and a 10,000 reduction in fixed costs. Based on these data, the break-even point would: a. decrease by 1,000 units. b. decrease by 125 units. c. increase by 375 units. d. increase by 500 units.arrow_forward
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