PROBLEM 4. Cindy, Inc., sells a single product. The company's most recent income statement is given below. Sales (10,000 units) Less variable expenses Contribution margin Less fixed expenses P800,000 ( 440,000) 360,000 (180,000) P180,000 Operating income Requirements: 1. If 2,000 more units are sold, how much increase in profit is expected? 2. If sales volume increases by15 percent compute the new profit. 3. If the firm were able to increase its sales volume by 15 percent without a change in its selling price, variable costs, or fixed costs, would this change the breakeven point?

PROBLEM 4. Cindy, Inc., sells a single product. The company's most recent income statement is given below. Sales (10,000 units) Less variable expenses Contribution margin Less fixed expenses P800,000 ( 440,000) 360,000 (180,000) P180,000 Operating income Requirements: 1. If 2,000 more units are sold, how much increase in profit is expected? 2. If sales volume increases by15 percent compute the new profit. 3. If the firm were able to increase its sales volume by 15 percent without a change in its selling price, variable costs, or fixed costs, would this change the breakeven point?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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PROBLEM 4. Cindy, Inc., sells a single product. The company's most recent income statement is given below. P800,000 ( 440,000) 360,000 (180,000) P180,000 Sales (10,000 units) Less variable expenses Contribution margin Less fixed expenses Operating income e 4. If the firm were able to increase both its selling price and variable cost by 15 percent, would the breakeven point in units or in pesos change? 5. Prepare comparative income statements at sales level of 5,000 and 6,000 units.
Adam, Inc., sells a single product. The company's most recent income statement is given below. Sales Less variable expenses Contribution margin Less fixed expenses $200,000 (120,000) 80,000 (50,000) 30.000 Net income Required: Contribution margin ratio is b. a. % Breakeven point in total sales dollars is To achieve $40,000 in net income, sales must total d. $ $ С. If sales increase by $50,000, net income will increase by |4
PROBLEM 3. The income statement of Sandra Company follows: Sales Less Variable expenses Contribution margin Less Fixed costs P500,000 (275.000) 225,000 (180,000) P 45,000 Operating income Sandra produces and sells a single product. The above income statement is based on sales of 100,000 units. Requirements: 1. Compute the breakeven point in units and in pesos. 2. Suppose that the selling price increases by 10 percent. Will the breakeven increase or decrease? 3. Suppose that the variable cost per unit increases by P0.35. What will happen to breakeven point? Can you predict whether the breakeven increases or decreases if both the selling price and the unit variable cost increase? Recompute the breakeven point by incorporating both the changes in requirement 2 and 3. 5. Assume that total fixed costs increase by P50,000. Will the breakeven point change? 4.
Read the following scenario and answer the question#13 and 14. The president of the Lamda wholesale company, which markets a single product, requests an expectation for the gross profit decline for 19B. The following information is available: 19A 19B Units P.U Value Total Units P.U Value Total Sales 25,000 $3.00 $75,000 24,000 $2.75 $6,000 Cost of sales 25,000 $2.38 24,000 $2.40 59.500 $15,500 57,600 $8,400 Question No. 13: Calculate cost variances Question No. 14: Calculate volume variances
Question 3: Şahar Company's financial information is given in the table below. Year Sales (OMR) | Fixed Costs Variable Costs 2019 405000 90000 225000 2020 450000 120000 240000 Calculate: a) P/V ratio, b) B.E.P. c) Sales required to earn a profit of OMR 40000. d) Margin of safety at a profit of OMR 50000 e) Profit when sales are OMR. 200000.
Question 3: Sohar Company's financial information is given in the table below. Year Sales (OMR) Fixed Costs Variable Costs 2019 405000 90000 225000 2020 450000 120000 240000 Calculate: a) P/V ratio, b) В.Е.Р. c) Sales required to earn a profit of OMR 40000. d) Margin of safety at a profit of OMR 50000 Profit when sales are OMR. 200000. e)
Study the information given below and answer each of the following questions independently: 3.1 Calculate the total Marginal Income and Net Profit/Loss if all the tables are sold. 3.2 Use the marginal income ratio to calculate the break-even value. 3.3 Calculate the new total Marginal Income and Net Profit/Loss, if an increase in advertising expenseby R100 000 is expected to increase sales by 400 units.3.4 How many units must be sold if the company wishes to earn a net profit of R298 920. 3.5 Based on the expected sales volume of 2 400 units, determine the sales price per unit (expressedin rands and cents) that will enable the company to break even.
Margin of Safety a. If Canace Company, with a break-even point at $401,800 of sales, has actual sales of $490,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number. 1. $___________ 2. ____________% b. If the margin of safety for Canace Company was 45%, fixed costs were $1,648,350, and variable costs were 55% of sales, what was the amount of actual sales (dollars)?(Hint: Determine the break-even in sales dollars first.)$___________
REQUIRED Use the information given below to calculate each of the following independently: 3.1 Expected total Marginal Income and Net Profit/Loss 3.2 3.3 3.4 3.5 Margin of safety (as a percentage; expressed to two decimal places) Break-even quantity if the selling price drops by 10% Break-even value using the marginal income ratio, if the company spends an additional R435 200 on salaries Selling price per unit that will enable the company to achieve a net profit of R1 500 000 INFORMATION Slumber Limited manufactures beds. The following information was extracted from the budget for 2024: Expected production and sales (units) Selling price per bed Direct materials cost per bed Direct labour cost per bed Variable manufacturing overheads cost per bed Fixed manufacturing overheads cost Sales commission (as a percentage of the selling price) Fixed administrative and selling costs 1 200 R6 000 R1 700 R860 R320 R1 084 800 20% R720 000
godo subject-Accounting The following information pertains to Venus Company's cost-volume-profit relationships: Break-even point in units sold = 1,000; Variable costs per unit = GHC500; Total fixed costs = GH¢150,000. How much will be contributed to profit before taxes by the 1,001st unit sold?
Direction: Read the following independent cases given below. Provide necessary answer for all issues being asked. Provide a separate answer sheet for all your specific answers. A. The DIGITAL Company provided you with the following comparative Income Statement for your analysis. He wants you to enlighten the management on why the net profit decline. Sales Cost of Sales Gross Margin Operating Expenses Net Profit 2020 P680,000 170,000 P510,000 210,000 P300000 2021 P 570,000 200,000 P 370,000 100,000 P 270.000 Required: 1. Using Horizontal Analysis, calculate the peso change and the percentage changes. 2. Using Vertical Analysis, prepare the comparative common-size Income Statements. 3. Evaluate the results of your Analysis and explain to the management why the net profit declined.
Verify your answer by preparing a continuation format income statement at the target sales level 4. compute the company's matgin of saftery in both dollar and percentage terms 5. What is the company's cm ration? If the company can sell more units thereby increasing sales by 77000 per month and there is no change in fixed expenses by how much would you expect monthly net operating income to increase?