MyLab Accounting with Pearson eText -- Access Card -- for Managerial Accounting (My Accounting Lab)
5th Edition
ISBN: 9780134161648
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 7, Problem 7.25AE
1.
To determine
To compute: Monthly breakeven sales in dollars.
2.
To determine
To compute: Operating income (loss) if revenues are $540,000 & if they are $1,040,000.
3.
To determine
To explain: The breakeven sales in dollars computed in requirement 1 makes sense under the computed breakeven sales in requirement 2.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The actual and planned data for Underwater University for the Fall term were as follows:
Actual
Planned
Enrollment
4,500
4,125
Tuition per credit hour
$120
$135
Credit hours
60,450
43,200
Registration, records, and marketing costs per enrolled student
$275
$275
Instructional costs per credit hour
$64
$60
Depreciation on classrooms and equipment
$825,600
$825,600
Registration, records, and marketing costs vary by the number of enrolled students, while instructional costs vary by the number of credit hours. Depreciation is a fixed cost.
Prepare a variable costing income statement showing the contribution margin and operating income for the Fall term.
Underwater University
Variable Costing Income Statement
For the Fall Term
Revenue
$
Variable costs:
Registration, records, and marketing costs
$
Instructional costs
Total variable costs
$
Contribution margin
$
Depreciation on classrooms and equipment
Operating income…
Please step by step process.
Professor von Nordenflycht presents Dean Kayande with two new proposals for offering a graduate certificate program. Both programs will cost $60,000, for classroom and instructor time. Both programs are projected to have two possible revenue outcomes. Program 1, which focuses on accounting, is projected to have a 50% chance of generating $150,000 in revenue and a 50% chance of generating $100,000 in revenue. Project 2, which focuses on cryptocurrencies, is predicted to have a 62.5% chance of generating $200,000 in revenue or, otherwise, generating no revenue!
a. What is the expected value of each program?
b. What is the variance of each program?
Learning CurveBordner Company manufactures HVAC (heating, ventilation, and air conditioning) systems for commercial buildings. For each new design, Bordner faces a 90 percent learning rate. On aver-age, the first unit of a new design takes 600 hours. Direct labor is paid $25 per hour.
Required:1. Set up a table with columns showing: the cumulative number of units, cumulative average time per unit in hours, and cumulative total time in hours. Show results by row for total pro-duction of one unit, two units, four units, eight units, and sixteen units. (Round hour answers to two significant digits.)
2. What is the total labor cost if Bordner makes the following number of units: one, four, sixteen? What is the average cost per system for the following number of systems: one, four, or sixteen? (Round your answers to the nearest dollar.)
3. Using the logarithmic function, set up a table with columns showing: the cumulative number of units, cumulative average time per unit in hours,…
Chapter 7 Solutions
MyLab Accounting with Pearson eText -- Access Card -- for Managerial Accounting (My Accounting Lab)
Ch. 7 - (Learning Objective 1) The contribution margin is...Ch. 7 - (Learning Objective 1) The contribution margin...Ch. 7 - (Learning Objective 2) The formula to find the...Ch. 7 - Prob. 4QCCh. 7 - Prob. 5QCCh. 7 - Prob. 6QCCh. 7 - (Learning Objective 4) Which of the following is...Ch. 7 - Prob. 8QCCh. 7 - Prob. 9QCCh. 7 - Prob. 10QC
Ch. 7 - Compute unit contribution margin and contribution...Ch. 7 - Prob. 7.2SECh. 7 - Prob. 7.3SECh. 7 - Find target profit volume (Learning Objective 2)...Ch. 7 - Prob. 7.5SECh. 7 - Prob. 7.6SECh. 7 - Prob. 7.7SECh. 7 - Prob. 7.8SECh. 7 - Compute margin of safety (Learning Objective 5)...Ch. 7 - Compute and use operating leverage factor...Ch. 7 - Calculate breakeven and target profit sales...Ch. 7 - Prob. 7.12SECh. 7 - Prob. 7.13SECh. 7 - Prob. 7.14SECh. 7 - Compute margin of safety (Learning Objective 5)...Ch. 7 - Compute and use operating leverage factor...Ch. 7 - Prob. 7.17SECh. 7 - Prob. 7.18SECh. 7 - Prepare contribution margin income statements...Ch. 7 - Work backward to find missing information...Ch. 7 - Find breakeven and target profit volume (Learning...Ch. 7 - Prob. 7.22AECh. 7 - Prob. 7.23AECh. 7 - Prob. 7.24AECh. 7 - Prob. 7.25AECh. 7 - Prob. 7.26AECh. 7 - Sustainability and CVP concepts (Learning...Ch. 7 - Prob. 7.28AECh. 7 - Calculate contribution margin and breakeven...Ch. 7 - Prob. 7.30AECh. 7 - Extension of E7-30A: Multiproduct firm (Learning...Ch. 7 - Prob. 7.32AECh. 7 - Breakeven and an advertising decision at a...Ch. 7 - Prob. 7.34AECh. 7 - Prob. 7.35AECh. 7 - Prob. 7.36AECh. 7 - Comprehensive CVP analysis (Learning Objectives 1,...Ch. 7 - Comprehensive CVP analysis (Learning Objectives 1,...Ch. 7 - Prob. 7.39AECh. 7 - Prob. 7.40BECh. 7 - Work backward to find missing information...Ch. 7 - Find breakeven and target profit volume (Learning...Ch. 7 - Prob. 7.43BECh. 7 - Prob. 7.44BECh. 7 - Prob. 7.45BECh. 7 - Prob. 7.46BECh. 7 - Continuation of E7-46B: Changing business...Ch. 7 - Sustainability and CVP (Learning Objective 3)...Ch. 7 - Prob. 7.49BECh. 7 - Prob. 7.50BECh. 7 - Prob. 7.51BECh. 7 - Prob. 7.52BECh. 7 - Find breakeven for a multiproduct firm (Learning...Ch. 7 - Breakeven and an advertising decision at a...Ch. 7 - Compute margin of safety and operating leverage...Ch. 7 - Use operating leverage factor to find fixed costs...Ch. 7 - Prob. 7.57BECh. 7 - Comprehensive CVP analysis (Learning Objectives 1,...Ch. 7 - Prob. 7.59BECh. 7 - Comprehensive CVP analysis (Learning Objectives 1,...Ch. 7 - Find missing data in CVP relationships (Learning...Ch. 7 - Prob. 7.62APCh. 7 - Prob. 7.63APCh. 7 - Prob. 7.64APCh. 7 - Prob. 7.65APCh. 7 - Prob. 7.66APCh. 7 - Find missing data in CVP relationships (Learning...Ch. 7 - Prob. 7.68BPCh. 7 - Comprehensive CVP problem (Learning Objectives 1,...Ch. 7 - Prob. 7.70BPCh. 7 - Prob. 7.71BPCh. 7 - CVP analysis at a multiproduct firm (Learning...Ch. 7 - Prob. 7.73SCCh. 7 - Discussion Questions 1. Define breakeven point....Ch. 7 - Prob. 7.75ACTCh. 7 - Prob. 7.76ACTCh. 7 - Prob. 7.77ACT
Knowledge Booster
Similar questions
- PROBLEM 1 The School of Management and Accountancy is planning to begin an online MSA (Master of Science in Accountancy) program. The initial start-up costs for computing equipment, facilities, course development, and staff recruitment and development are P350,000. The school plans to charge tuition of P18,000 per student per year. However, the university administration will charge the school P12,000 per student for the first 100 students enrolled each year for administrative costs and its share of the tuition payments. Required: PROVIDE A DETAILED EXCEL SOLUTION a. How many students does the school need to enroll in the first year to break even? b. If the school can enroll 75 students the first year, how much profit will it make? c. The school believes it can increase tuition to P24,000, but doing so would reduce enrollment to 35. Should the school consider doing this?arrow_forwardDwyran Ltd also produce, the Menai, which has been in production for a number of years, and to date 497 units of the Menai have been produced. The budget for the next quarter is showing the production of 65 units of the Menai. If the 1st ever unit took 200 hours and an 80% learning curve applies: Calculate the total labours hours needed for the production of 65 units of the Menai Calculate the average labour time per unit Note: the learning co-efficient of 80% is -0.322arrow_forwardQuestion ENGINEERING ECONOMICS You want to launch a printing services business on campus. The initial cost to get the business running with a September 1st launch date would be $2,000. You estimate that the revenues would approximately offset your costs (e.g. paper, toner, etc.) in the first month of operation so that the monthly profit would be $0. Afterwards, you estimate that profits would increase by $80 each month until the end of the academic year (i.e. $80 profit in October, $160 profit in November, etc. until the end of April). Your annual MARR is 10%, compounded monthly. (a) Calculate the internal rate of return for your investment based on an 8 months study period. Select the appropriate IRR between options 1 to 4 below. (b) Suppose that you now consider another investment opportunity for your printing business services, also with monthly profits, and the internal rate of return of 3%. Is this alternative economically feasible based on IRR?arrow_forward
- Bordner Company manufactures HVAC (heating, ventilation, and air conditioning) systems for commercial buildings. For each new design, Bordner faces a 90 percent learning rate. On average, the first unit of a new design takes 600 hours. Direct labor is paid 25 per hour. Required: 1. Set up a table with columns showing: the cumulative number of units, cumulative average time per unit in hours, and cumulative total time in hours. Show results by row for total production of one unit, two units, four units, eight units, and sixteen units. (Round hour answers to two significant digits.) 2. What is the total labor cost if Bordner makes the following number of units: one, four, sixteen? What is the average cost per system for the following number of systems: one, four, or sixteen? (Round your answers to the nearest dollar.) 3. Using the logarithmic function, set up a table with columns showing: the cumulative number of units, cumulative average time per unit in hours, cumulative total time in hours, and the time for the last unit. Show results by row for each of units one through eight. (Round answers to two significant digits.)arrow_forwardProfit Planning and Control This case is a manufacturer and could make specialty bikes, ski or outdoor equipment, computers, food like chocolates, saltwater taffy, cookies, or donuts, etc. Create the balance sheet, income statement, and statement of the cash flow from the following information. Use the following information for the learning experiences Sales volume units = 11,000 Sales price/unit = $100 Variable manufacturing costs/unit = $60 Fixed manufacturing costs = $210,000 Fixed sales & administration costs = $190,000 Business income tax rate = 25% Current assets = $250,000 (Cash $50,000, Accounts Receivables $100,000, Inventory $100,000) Fixed assets = $750,000 Current liabilities = $200,000 (Accounts Payable $100,000, Short Term Debt $100,000) Long Term Debt = $300,000 Owners' Equity = $500,000arrow_forwardNUBD Company is planning to introduce a new product with an 80 percent learning rate for production for batches of 1,000 units. The variable labor costs are P30 per unit for the first 1,000-unit batch. Each batch requires 100 hours. There are P10,000 in fixed costs not subject to learning. What is the cumulative total time (labor hours) to produce 16,000 units based on the cumulative average-time learning curve? A. 655.36 hours B. 256 hours C. 160 hours D. 409.6 hoursarrow_forward
- FNG Paint (Pty) Ltd produces finger paint and sells them to pre‐schools. The following information relates to a set of finger paint. A set of finger paint is considered to be one unit. Direct labour needed for the first set of paint 4 hoursDirect labour costs per unit R30 per hourDirect material costs per unit R25Total Fixed costs R2 000Learning curve 80% Using the learning curve theory and information provided above, calculate the expected average cost for one set of paint should four and sixteen sets be produced, respectively. Round off to two decimal places.arrow_forwardProfessional University teaches a large range of undergraduate courses. It is interested in determining the cost equation for the facilities cost as a function of student credit hours so that it an more accurately budget its facilities costs as enrollment grows. Information for the high and low cost semesters and volumes for last 5 years appears below Semester Student Cresit Hours Facilities Cost Spring 2007 250,000 $500,000 Fall 2004 300,000 $530,000 Using the high low method, with student credit hours as the activity driver, wht is the equation for facilities cost (FC) as a function of student credit hours?arrow_forwardThe Culinary Institute is considering a classroom remodeling project. The cost of the remodel would be $350,000 and will be depreciated over six years using the straight- line method. The model will acoomoodate five extra student per year. Additional information related to the project follows:Cost of the remodel project: $350,000 Useful life of project in years: 6 Annual number of extra students: 5 Annual tuition per student: $22,000 Before- tax incremental cost of a student: $2,000 Company's income tax rate: 20% Required rate of return: 12% Assuming a six- year time horizon, what is the internal rate of return of the remodeling project? Calculate using both present value factors and separately using Excel's IRR function. Please include formulas to show how you arrive at each solution! A) Annual cash flow: Revenue ? Less costs:Other than depreciation ? Depreciation ? Income before taxes ? Income tax expense ?…arrow_forward
- Triad Children's Center (TCC), a non-profit organization, uses relevant cost analysis to determine whether new services are desirable. TCC is looking at adding a new educational program for grade school children who are having difficulty with their reading and math skills. The following relevant costs are expected if the program is accepted: Costs (per year) Program Director salary $ 39,000 Part-time Assistants $ 28,000 Variable cost per child $ 900 TCC estimates that a maximum of 40 children will participate in this program in the first year. If TCC decides to implement this program, funding will be received from the City Chamber of Commerce ($50,000) and a local Private University Endowment Fund ($35,000). Calculate the expected surplus or deficit from operations given the above information.arrow_forwardSandhill’s managers have determined that variable costs per unit will increase by 20% beginning next month. To offset this increase in costs, they are considering a 20% increase in the sales price. Market research indicates that the price increase will result in a 2% decrease in the number of learning systems Sandhill sells. What will be Sandhill’s expected operating income if the price increase is implemented? (Round per unit calculations to 2 decimal places e.g. 52.75 and final answer to 0 decimal places, e.g. 5,275.) Total Per Unit Sales revenue $687,500 $55 Variable expenses 240,625 19.25 Contribution margin 446,875 $35.75 Fixed expenses 312,000 Operating income $ 134,875arrow_forwardKSB wants to run a new programme. Estimated fees to be paid by a student is 8000.00. Fixed cost for the programme is expected to be 140,000.00 per anum while variable cost per student is estimated at 4000.00. Expected enrolment is 100 students. A. What is the contribution per student? B. What is the c/s ratio? C. ascertain the number of students to enrol to breakeven D. Ascertain the enrolment fees value at breakeven point E. What is the margin of safety.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning