Sunn Company manufactures a single product that sells for $240 per unit and whose variable costs are $192 per unit. The company's annual fixed costs are $734,400. Management targets an annual income of $1,200,000. (1) Compute the unit sales to earn the target income. Numerator: 1 Denominator: (2) Compute the dollar sales to earn the target income. Numerator: 1 1 Denominator: = = Units to Achieve Target Units to achieve target Dollars to Achieve Target Dollars to achieve target

Sunn Company manufactures a single product that sells for $240 per unit and whose variable costs are $192 per unit. The company's annual fixed costs are $734,400. Management targets an annual income of $1,200,000. (1) Compute the unit sales to earn the target income. Numerator: 1 Denominator: (2) Compute the dollar sales to earn the target income. Numerator: 1 1 Denominator: = = Units to Achieve Target Units to achieve target Dollars to Achieve Target Dollars to achieve target

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 47E: Klamath Company produces a single product. The projected income statement for the coming year is as...

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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?
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?
Garrett Company provided the following information: Common fixed cost totaled 46,000. Garrett allocates common fixed cost to Product 1 and Product 2 on the basis of sales. If Product 2 is dropped, which of the following is true? a. Sales will increase by 300,000. b. Overall operating income will increase by 2,600. c. Overall operating income will decrease by 25,000. d. Overall operating income will not change. e. Common fixed cost will decrease by 27,600.
Sunn Company manufactures a single product that sells for $180 per unit and whose variable costs are $135 per unit. The company's annual fixed costs are $562,500. Management targets an annual income of $1,012,500. (1) Compute the unit sales to earn the target income. Numerator: Denominator: Units to Achieve Target = Units to achieve target (2) Compute the dollar sales to earn the target income. Numerator: Denominator: Dollars to Achieve Target = Dollars to achieve target Ch
Sunn Company manufactures a single product that sells for $120 per unit and whose variable costs are $90 per unit. The company's annual fixed costs are $432.000 Management targets an annual income of $750,000. (1) Compute the unit sales to earn the target income. Numerator: 1 Denominator: (2) Compute the dollar sales to earn the target income.. Numerator: Denominator P M = Units to Achieve Target Units to achieve target Dollars to Achieve Target Dollars to achieve target
A company reports the following information for the single product it manufactures. Sales price Variable cost per unit Total fixed costs Target income (a) Compute contribution margin per unit. $ 230 per unit $ 161 per unit $ 986,700 per year $572,700 per year Contribution margin (b) Compute the break-even point in units. Numerator (c) Compute the unit sales to earn the target income. Numerator Denominator = Break-Even Units = = Break-even units Denominator = Units to Achieve Target = Units to achieve target
Blanchard Company manufactures a single product that sells for $136 per unit and whose total variable costs are $102 per unit. The company's annual fixed costs are $496,400. Management targets an annual pretax income of $850,000. Assume that fixed costs remain at $496,400. (1) Compute the unit sales to earn the target income. Choose Numerator: Fixed costs plus pretax income Choose Denominator: = Units to Achieve Target Contribution margin per unit = Units to achieve target 0 (2) Compute the dollar sales to earn the target income. Choose Numerator: Fixed costs plus pretax income Choose Denominator: Dollars to Achieve Target 1 Contribution margin ratio = Dollars to achieve target 0
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The XYZ Company produces and sells two products: The Riffs and The Raffs. Below is revenue and cost information to facilitate the development of a basic segmented income statement. Product Riffs Raffs Sales Price per unit $8.00 6.00 Variable Cost per unit $3.20 3.00 Traceable Fixed Costs $62,000 $44,000 It is expected that the company will incur $21,000 of common fixed expenses and unit sales are expected to be 12,000 of Riffs and 18,000 of Raffs. Required: Construct a Contribution Format Income Statement segmented by product line and company total.
Jamison Company produces and sells Product X at a total cost of $1,300 per unit, of which $880 is product cost and $420 is selling and administrative expenses. In addition, the total cost of $1,300 is made up of $740 variable cost and $560 fixed cost. The desired profit is $169 per unit. Determine the markup percentage on total cost.fill in the blank 1 %
Blanchard Company manufactures a single product that sells for $180 per unit and whose total variable costs are $126 per unit. The company's annual fixed costs are $842,400. Management targets an annual pretax income of $1,350,000. Assume that fixed costs remain at $842,400. (1) Compute the unit sales to earn the target income. Choose Numerator: Choose Denominator: Units to Achieve Target Units to achieve target %3D (2) Compute the dollar sales to earn the target income. Choose Numerator: Choose Denominator: Dollars to Achieve Target Dollars to achieve target %3D
A company reports the information below for the single product it produces and sells. Sales price per unit Variable costs per unit Total fixed costs (1) Compute contribution margin per unit. $95 $38 $ 193,800 Contribution margin (2) Compute the break-even point in units. Numerator 1 per unit per unit per unit Denominator (3) Compute income in dollars if 3,700 units are sold. X Break Even Units = Break even units Fixed costs Income