MANAGERIAL ACCT.-WILEYPLUS BLKBRD PKG
7th Edition
ISBN: 9781118869765
Author: Weygandt
Publisher: WILEY
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Textbook Question
Chapter 5, Problem 5.5BYP
Your roommate asks for your help on the following questions about CVP analysis formulas.
(a) How can the mathematical equation for break-even sales show both sales units and sales dollars?
(b) How do the formulas differ for unit contribution margin and contribution margin ratio?
(c) How can contribution margin be used to determine break-even sales in units and in dollars?
Instructions
Write a memo to your roommate stating the relevant formulas and answering each question.
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Students have asked these similar questions
Jackson Corporation has asked you to analyze their sales and cost data. They have provided you with the below dashboard:
Determine the unit contribution margin and contribution margin ratio.
Unit Contribution Margin =
Contribution Margin ratio =
Calculate the break-even point in units and sales dollars.
Note: Round your answers to the nearest whole number.
Break-Even Units =
Break-Even Sales Dollars =
Compute Jackson’s margin of safety in units and as a percentage of sales.
Note: Round your intermediate calculations to the nearest whole number. Round your final percentage of sales answers to 2 decimal places (i.e., 0.1234 should be entered as 12.34).
Margin of Safety in units =
Margin of Safety as a percentage of sales =
1.
Fill in the missing numbers in the table. Use the following questions to help fill in the missing numbers in the table:
a. What is the total contribution margin?
b. What is the total variable expense?
c. How many units were sold?
d. What is the per-unit variable expense?
e. What is the per-unit contribution margin?
2.
Answer the following questions about breakeven analysis:
a. What is the breakeven point in units?
b. What is the breakeven point in sales dollars?
3.
Answer the following questions about target profit analysis and safety margin:
a. How many units must the company sell in order to earn a profit of
$48,000?
b. What is the current margin of safety in units?
c. What is the margin of safety in sales dollars?
d. What is the margin of safety in percentage?
Claudia wants to perform a break-even analysis on her very busy casual-dining operation. She has obtained the following operating results from last month’s income statement and POS system sales records:
What is her average sale per guest? What is her contribution margin (CM) percentage?
What is her variable cost percentage? What is her fixed cost percentage?
What is her break-even point in sales? What is her break-even point in customers?
Chapter 5 Solutions
MANAGERIAL ACCT.-WILEYPLUS BLKBRD PKG
Ch. 5 - (a) What is cost behavior analysis? (b) Why is...Ch. 5 - (a) Scott Winter asks your help in understanding...Ch. 5 - Contrast the effects of changes in the activity...Ch. 5 - J. P. Alexander claims that the relevant range...Ch. 5 - The relevant range is indispensable in cost...Ch. 5 - Prob. 6QCh. 5 - How should mixed costs be classified in CVP...Ch. 5 - At the high and low levels of activity during the...Ch. 5 - "Cost-volume-profit (CVP) analysis is based...Ch. 5 - Faye Dunn defines contribution margin as the...
Ch. 5 - Prob. 11QCh. 5 - Prob. 12QCh. 5 - Prob. 13QCh. 5 - Prob. 14QCh. 5 - Define the term margin of safety. If Revere...Ch. 5 - Prob. 16QCh. 5 - Prob. 17QCh. 5 - Monthly production costs in Dilts Company for two...Ch. 5 - Prob. 5.2BECh. 5 - For Wesland Company, a mixed cost is 15,000 plus...Ch. 5 - Bruno Company accumulates the following data...Ch. 5 - Markowis Corp. has collected the following data...Ch. 5 - Determine the missing amounts.Ch. 5 - Russell Inc. had sales of 2,20O,0O0 for the first...Ch. 5 - Rice Company has a unit selling price of 520,...Ch. 5 - Presto Corp. had total variable costs of 180,000....Ch. 5 - For Flynn Company, variable costs are 70% of...Ch. 5 - Prob. 5.11BECh. 5 - Prob. 5.12BECh. 5 - Amanda Company reports the following total costs...Ch. 5 - Westerville Company accumulates the following data...Ch. 5 - Prob. 5.3DICh. 5 - Snow Cap Company has a unit selling price of 250,...Ch. 5 - Presto Company makes radios that sell for 30 each....Ch. 5 - Bonita Company manufactures a single product....Ch. 5 - Shingle Enterprises is considering manufacturing a...Ch. 5 - The controller of Norton Industries has collected...Ch. 5 - Family Furniture Corporation incurred the...Ch. 5 - The controller of Hall industries has collected...Ch. 5 - PCB Corporation manufactures a single product....Ch. 5 - Marty Moser wants Moser Company to use CVP...Ch. 5 - All That Blooms provides environmentally friendly...Ch. 5 - The Palmer Acres Inn is trying to determine its...Ch. 5 - In the month of March, Style Salon services 560...Ch. 5 - Spencer Kars provides shuttle service between four...Ch. 5 - In 2016. Manhoff Company had a break-even point of...Ch. 5 - Billings Company has the following information...Ch. 5 - Naylor Company had 210,000 of net income in 2016...Ch. 5 - Yams Company reports the following operating...Ch. 5 - Glacial Company estimates that variable costs will...Ch. 5 - Felde Bucket Co., a manufacturer of rain barrels,...Ch. 5 - Vin Diesel owns the Fredonia Barber Shop. He...Ch. 5 - Jorge Company bottles and distributes B-Lite, a...Ch. 5 - Tanek Corp.'s sales slumped badly in 2017. For the...Ch. 5 - Mary Willis is the advertising manager for Bargain...Ch. 5 - Prob. 5.5APCh. 5 - Kaiser Industries carries no inventories. Its...Ch. 5 - Bill Johnson, sales manager, and Diane Buswell,...Ch. 5 - Creative Ideas Company has decided to introduce a...Ch. 5 - The condensed income statement for the Peri and...Ch. 5 - Prob. 5.3BYPCh. 5 - Prob. 5.4BYPCh. 5 - Your roommate asks for your help on the following...Ch. 5 - Prob. 5.6BYPCh. 5 - Cost-volume-profit analysis can also be used in...
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