tesLast month when Holiday Creations, Incorporated, sold 40,000units, total sales were $160,000, total variable expenses were$116,800, and fixed expenses were $36,500.Required:1. What is the company's contribution margin (CM) ratio?2. What is the estimated change in the company's net operatingincome if it can increase sales volume by 250 units and totalsales by $1,000?Note: Do not round intermediate calculations.1. Contribution margin ratio2. Estimated change in net operating income%

Variable costing approach of preparing income statement shows the contribution margin of the firm…

Answered: Last month when Holiday Creations,…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 5EB: Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90....

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Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?
Klamath Company produces a single product. The projected income statement for the coming year is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. 2. Suppose 10,000 units are sold above break-even. What is the operating income? 3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue. (Note: Round the contribution margin ratio to four decimal places, and round the sales revenue to the nearest dollar.) Suppose that revenues are 200,000 more than expected for the coming year. What would the total operating income be?
Maple Enterprises sells a single product with a selling price of $75 and variable costs per unit of $30. The companys monthly fixed expenses are $22,500. What is the companys break-even point in units? What is the companys break-even point in dollars? Construct a contribution margin income statement for the month of September when they will sell 900 units. How many units will Maple need to sell in order to reach a target profit of $45,000? What dollar sales will Maple need in order to reach a target profit of $45,000? Construct a contribution margin income statement for Maple that reflects $150,000 in sales volume.
If a company has fixed costs of $6.000 per month and their product that sells for $200 has a contribution margin ratio of 30%, how many units must they sell in order to break even? A. 100 B. 180 C. 200 D. 2,000
Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90. The companys monthly fixed expenses are $180,000. What is the companys break-even point in units? What is the companys break-even point in dollars? Prepare a contribution margin income statement for the month of October when they will sell 10,000 units. How many units will Cadre need to sell in order to realize a target profit of $300,000? What dollar sales will Cadre need to generate in order to realize a target profit of $300,000? Construct a contribution margin income statement for the month of August that reflects $2,400,000 in sales revenue for Cadre, Inc.
Last month when Holiday Creations, Incorporated, sold 36,000 units, total sales were $144,000, totai variable expenses were $109,440, and fixed expenses were $38,500. Required: 1. What is the company's contribution margin (CM) ratio? 2. What is the estimated change in the company's net operating income if it can increase sales volume by 450 units and total sales by $1,800? (Do not round intermediate calculations.) 1. Contribution margin ratio 2. Estimated change in net operating income
Last month when Holiday Creations, Incorporated, sold 37,000 units, total sales were $148,000, total variable expenses were $115,440, and fixed expenses were $36,500. Required: 1. What is the company's contribution margin (CM) ratio? 2. What is the estimated change in the company's net operating income if it can increase sales volume by 675 units and total sales by $2,700? Note: Do not round intermediate calculations. 1. Contribution margin ratio 2. Estimated change in net operating income %
Last month when Holiday shane, Inc., sold 42,000 units, total sales were $400,000, total variable expenses were $244,000, and fixed expenses were $39,700. 20 questions left-Renews M Required: Enter question 1. What is the company's contribution margin (CM) ratio? 2. What is the estimated change in the company's net operating income if it can increase total sales by $1,800? (Do not round intermediate calculations.)
Last month when Holiday Creations, Incorporated, sold 35,000 units, total sales were $140,000, total variable expenses were $109,200, and fixed expenses were $38,600. Required: 1. What is the company's contribution margin (CM) ratio? 2. What is the estimated change in the company's net operating income if it can increase sales volume by 300 units and total sales by $1,200? Note: Do not round intermediate calculations. Answer is complete but not entirely correct. 1. Contribution margin ratio 2. Estimated change in net operating income 22 % $ 347 X
Last month when Holiday Creations, Inc., sold 45,000 units, total sales were $289,000, total variable expenses were $236,980, and fixed expenses were $35,400. Required: 1. What is the company's contribution margin (CM) ratio? 2. What is the estimated change in the company's net operating income if it can increase total sales by $1,700? (Do not round intermediate calculations.) 1. Contribution margin ratio % 2. Estimated change in net operating income
Last month when Holiday Creations, Incorporated, sold 41,000 units, total sales were $164,000, total variable expenses were $127,920, and fixed expenses were $38,700. Required: 1. What is the company's contribution margin (CM) ratio? 2. What is the estimated change in the company's net operating income if it can increase sales volume by 525 units and total sales by $2,100? (Do not round intermediate calculations.) 1. Contribution margin ratio 2. Estimated change in net operating income 22%
Last month when Holiday Creations, Inc., sold 41,000 units, total sales were $302,000, total variable expenses were $256,700, and fixed expenses were $36,900. Required: 1. What is the company's contribution margin (CM) ratio? 2. What is the estimated change in the company's net operating income if it can increase total sales by $2,500? (Do nòt round intermediate calculations.) 1. Contribution margin ratio % 2. Estimated change in net operating income

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