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Citron Ltd. is a manufacturing firm that produces and sells a single product. The company's revenues and expenses for the last four months are given below. Sales in units Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses Shipping expense Advertising expense Salaries and commissions Insurance expense Amortization expense Total operating expenses Net income Cost of goods sold Shipping Salaries & commission Citron Ltd. Comparative Income Statement $ $ $ Break-even sales Annual profit (69,960 units) $ $ July 5,300 795,000 392, 200 402,800 $ $ $ 65,190 95,400 170,448 15,900 58,300 $ 405,238 (2,438) $ units August September 4,770 5,565 715,500 $ 834,750 362,520 401,740 352,980 $ 433,010 per unit per unit per unit 59,360 $ 95,400 151,580 15,900 58,300 380, 540 Required: 1. Management is concerned about the losses experienced during the spring and would like to know more about the cost behaviou Develop a cost equation for each of the costs. (Do not round intermediate calculations. Round "Per Unit" answers to 2 decimal places.) October 6,360 $ 954,000 451,560 $ 502,440 68,900 $ 75,260 95,400 95,400 191,330 15,900 58,300 171,190 15,900 58,300 $ 409,690 $436,190 (27,560) $ 23,320 $ 66,250 2. Assume that fixed costs are incurred uniformly throughout the year. Compute the annual break-even sales, and the profit if 69,96 units are sold during the year. (Round "Break-even sales" answer to nearest whole number.) 3. Calculate the change in profit if the selling price were reduced by $4.00 each and annual sales were to increase by 5,300 units.

Citron Ltd. is a manufacturing firm that produces and sells a single product. The company's revenues and expenses for the last four months are given below. Sales in units Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses Shipping expense Advertising expense Salaries and commissions Insurance expense Amortization expense Total operating expenses Net income Cost of goods sold Shipping Salaries & commission Citron Ltd. Comparative Income Statement $ $ $ Break-even sales Annual profit (69,960 units) $ $ July 5,300 795,000 392, 200 402,800 $ $ $ 65,190 95,400 170,448 15,900 58,300 $ 405,238 (2,438) $ units August September 4,770 5,565 715,500 $ 834,750 362,520 401,740 352,980 $ 433,010 per unit per unit per unit 59,360 $ 95,400 151,580 15,900 58,300 380, 540 Required: 1. Management is concerned about the losses experienced during the spring and would like to know more about the cost behaviou Develop a cost equation for each of the costs. (Do not round intermediate calculations. Round "Per Unit" answers to 2 decimal places.) October 6,360 $ 954,000 451,560 $ 502,440 68,900 $ 75,260 95,400 95,400 191,330 15,900 58,300 171,190 15,900 58,300 $ 409,690 $436,190 (27,560) $ 23,320 $ 66,250 2. Assume that fixed costs are incurred uniformly throughout the year. Compute the annual break-even sales, and the profit if 69,96 units are sold during the year. (Round "Break-even sales" answer to nearest whole number.) 3. Calculate the change in profit if the selling price were reduced by $4.00 each and annual sales were to increase by 5,300 units.

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 3E
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Citron Ltd. is a manufacturing firm that produces and sells a single product. The company's revenues and expenses for the last four months are given below. Sales in units. Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses Shipping expense Advertising expense Salaries and commissions Insurance expense Amortization expense Total operating expenses Net income Cost of goods sold Shipping Salaries & commission Citron Ltd. Comparative Income Statement $ Break-even sales Annual profit (69,960 units) $ $ $ $ July 5,300 795,000 392,200 402,800 $ $ $ 65,190 95,400 170,448 15,900 58,300 405,238 (2,438) $ $ units August 4,770 715,500 362,520 352,980 per unit per unit per unit 59,360 95,400 151,580 15,900 58,300 380,540 September 5,565 $ 834,750 $954,000 401,740 451,560 $ 433,010 $ 502,440 $ 68,900 95,400 October 6,360 171,190 15,900 58,300 Required: 1. Management is concerned about the losses experienced during the spring and would like to know more about the cost behaviour. Develop a cost equation for each of the costs. (Do not round intermediate calculations. Round "Per Unit" answers to 2 decimal places.) $ 75,260 95,400 191,330 15,900 58,300 $ 409,690 $ 436,190 (27,560) $ 23,320 $ 66,250 2. Assume that fixed costs are incurred uniformly throughout the year. Compute the annual break-even sales, and the profit if 69,960 units are sold during the year. (Round "Break-even sales" answer to nearest whole number.) 3. Calculate the change in profit if the selling price were reduced by $4.00 each and annual sales were to increase by 5,300 units.
Transcribed Image Text:Citron Ltd. is a manufacturing firm that produces and sells a single product. The company's revenues and expenses for the last four months are given below. Sales in units. Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses Shipping expense Advertising expense Salaries and commissions Insurance expense Amortization expense Total operating expenses Net income Cost of goods sold Shipping Salaries & commission Citron Ltd. Comparative Income Statement $ Break-even sales Annual profit (69,960 units) $ $ $ $ July 5,300 795,000 392,200 402,800 $ $ $ 65,190 95,400 170,448 15,900 58,300 405,238 (2,438) $ $ units August 4,770 715,500 362,520 352,980 per unit per unit per unit 59,360 95,400 151,580 15,900 58,300 380,540 September 5,565 $ 834,750 $954,000 401,740 451,560 $ 433,010 $ 502,440 $ 68,900 95,400 October 6,360 171,190 15,900 58,300 Required: 1. Management is concerned about the losses experienced during the spring and would like to know more about the cost behaviour. Develop a cost equation for each of the costs. (Do not round intermediate calculations. Round "Per Unit" answers to 2 decimal places.) $ 75,260 95,400 191,330 15,900 58,300 $ 409,690 $ 436,190 (27,560) $ 23,320 $ 66,250 2. Assume that fixed costs are incurred uniformly throughout the year. Compute the annual break-even sales, and the profit if 69,960 units are sold during the year. (Round "Break-even sales" answer to nearest whole number.) 3. Calculate the change in profit if the selling price were reduced by $4.00 each and annual sales were to increase by 5,300 units.
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