MANAGERIAL ACCOUNTING FUND. W/CONNECT
5th Edition
ISBN: 9781259688713
Author: Wild
Publisher: MCG
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Chapter 5, Problem 5PSA
To determine
Concept introduction:
A contribution margin income statement is a statement which shows the profit or loss for a entity for a particular product or overall performance.
The contribution margin ratio means calculated contribution in terms of percentage. The numerator part will be contribution amount and denominator part will net sales.
The break-even point formula is calculated as the total fixed costs of production part in numerator and price per unit less the variable costs to produce the product in denominator.
Requirement 1:
We have to determine the break-even point in sales dollar.
To determine
Concept introduction:
A contribution margin income statement is a statement which shows the profit or loss for a entity for a particular product or overall performance.
The contribution margin ratio means calculated contribution in terms of percentage. The numerator part will be contribution amount and denominator part will net sales.
The break-even point formula is calculated as the total fixed costs of production part in numerator and price per unit less the variable costs to produce the product in denominator.
Requirement 2:
We have to determine the financial position of the company.
To determine
Concept introduction:
A contribution margin income statement is a statement which shows the profit or loss for a entity for a particular product or overall performance.
The contribution margin ratio means calculated contribution in terms of percentage. The numerator part will be contribution amount and denominator part will net sales.
The break-even point formula is calculated as the total fixed costs of production part in numerator and price per unit less the variable costs to produce the product in denominator.
Requirement 3:
We have to determine the contribution margin statement.
To determine
Concept introduction:
A contribution margin income statement is a statement which shows the profit or loss for a entity for a particular product or overall performance.
The contribution margin ratio means calculated contribution in terms of percentage. The numerator part will be contribution amount and denominator part will net sales.
The break-even point formula is calculated as the total fixed costs of production part in numerator and price per unit less the variable costs to produce the product in denominator.
Requirement 4:
To analyze:
We have to analyze which product will be affected when the sales declines drastically.
To determine
Concept introduction:
A contribution margin income statement is a statement which shows the profit or loss for a entity for a particular product or overall performance.
The contribution margin ratio means calculated contribution in terms of percentage. The numerator part will be contribution amount and denominator part will net sales.
The break-even point formula is calculated as the total fixed costs of production part in numerator and price per unit less the variable costs to produce the product in denominator.
Requirement 5:
To analyze:
We have to analyze the factors which causes difference in cost structure..
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Letter Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 50,000 units of each product. Sales and costs for each product follow.
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Henna Company produces and sells two products, Carvings and Mementos. It manufactures these products in separate
factories and markets them through different channels. They have no shared costs. This year, the company sold 50,000
units of each product. Income statements for each product follow.
Sales
Variable costs
Contribution margin
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Income
Contribution margin
Carvings
$ 2,000,000
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Mementos
$ 2,000,000
250,000
1,750,000
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$ Per unit
Total
Mementos
$ Per unit
Total
Total
Chapter 5 Solutions
MANAGERIAL ACCOUNTING FUND. W/CONNECT
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