Super Sales Company is the exclusive distributor for a high-quality knapsack. The product sells for $100 per unit and has a CM rat 40%. The company's fixed expenses are $459,000 per year. The company plans to sell 12.000 knapsacks this year. Required: 1. What are the variable expenses per unit? Variable expenses per unit 2. Use the equation method for the following: a. What is the break-even point in units and in sales dollars? Break-even point in units Break-even point in sales dollars b. What sales level in units and in sales dollars is required to earn an annual profit of $99.000? Sales in units Sales in dollars c. What sales level in units is required to earn an annual after-tax profit of $99.000 if the tax rate is 25%2

Super Sales Company is the exclusive distributor for a high-quality knapsack. The product sells for $100 per unit and has a CM rat 40%. The company's fixed expenses are $459,000 per year. The company plans to sell 12.000 knapsacks this year. Required: 1. What are the variable expenses per unit? Variable expenses per unit 2. Use the equation method for the following: a. What is the break-even point in units and in sales dollars? Break-even point in units Break-even point in sales dollars b. What sales level in units and in sales dollars is required to earn an annual profit of $99.000? Sales in units Sales in dollars c. What sales level in units is required to earn an annual after-tax profit of $99.000 if the tax rate is 25%2

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 36P: Faldo Company produces a single product. The projected income statement for the coming year, based...

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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?
Super Sales Company is the exclusive distributor for a high-quality knapsack. The product sells for $80 per unit and has a CM ratio of 40%. The company's fixed expenses are $360,000 per year. The company plans to sell 13,000 knapsacks this year. Required: 1. What are the variable expenses per unit? Variable expenses per unit 2. Use the equation method for the following: a. What is the break-even point in units and in sales dollars? Break-even point in units Break-even point in sales dollars
Super Sales Company is the exclusive distributor for a high-quality knapsack. The product sells for $100 per unit and has a CM ratio of 40% The company's fixed expenses are $459,000 per year. The company plans to sell 12,000 knapsacks this year. Required: 1. What are the variable expenses per unit? Variable expenses per unit 2. Use the equation method for the following e. What is the break-even point in units and in sales dollars? Break-even point in units Break-even point in sales dollars b. What sales level in units and in sales dollars is required to earn an annual profit of $99,000? Sales in units Sales in dollars c. What sales level in units is required to earn an annual after-tax profit of $99,000 if the tax rate is 25%? Sales in units d. Assume that through negotiation with the manufacturer, Super Sales Company is able to reduce its variable expenses by $5 per unit. What is the company's new break-even point in units and in sales dollars? (Do not round Intermediate calculations.…
Super Sales Company is the exclusive distributor for a high-quality knapsack. The product sells for $60 per unit and has a CM ratio of 40%. The company’s fixed expenses are $540,000 per year. The company plans to sell 26,000 knapsacks this year. Required: 1. What are the variable expenses per unit? 2. Use the equation method for the following: a. What is the break-even point in units and in sales dollars? b. What sales level in units and in sales dollars is required to earn an annual profit of $108,000? c. What sales level in units is required to earn an annual after-tax profit of $108,000 if the tax rate is 20%? d. Assume that through negotiation with the manufacturer, Super Sales Company is able to reduce its variable expenses by $3 per unit. What is the company’s new break-even point in units and in sales dollars? (Do not round intermediate calculations. Round your final answers to the nearest whole number.)
Super Sales Company is the exclusive distributor for a high-quality knapsack. The product sells for $60 per unit and has a CM ratio of 40%. The company’s fixed expenses are $540,000 per year. The company plans to sell 26,000 knapsacks this year. Required: What are the variable expenses per unit? Use the equation method for the following: What is the break-even point in units and in sales dollars? What sales level in units and in sales dollars is required to earn an annual profit of $108,000? What sales level in units is required to earn an annual after-tax profit of $108,000 if the tax rate is 20%? Assume that through negotiation with the manufacturer, Super Sales Company is able to reduce its variable expenses by $3 per unit. What is the company’s new break-even point in units and in sales dollars? (Do not round intermediate calculations. Round your final answers to the nearest whole number.)
Lindon Company is the exclusive distributor for an automotive product that sells for $40 per unit and has aCM ratio of 30%. The company’s fixed expenses are $180,000 per year. The company plans to sell 16,000units this year.Required:1. What are the variable expenses per unit?2. Using the equation method:a. What is the break-even point in units and sales dollars?b. What sales level in units and in sales dollars is required to earn an annual profit of $60,000?c. Assume that by using a more efficient shipper, the company is able to reduce its variable expensesby $4 per unit. What is the company’s new break-even point in units and sales dollars?3. Repeat (2) above using the formula method.
Q. Samara Company is the exclusive distributor for a revolutionary bookbag. The product sells for $60 per unit and has a CM ratio of 40%. The company’s fixed expenses are $360,000 per year. The company plans to sell 17,000 bookbags this year. Required:Using the equation method:a. What is the break-even point in units and in sales dollars?b. What sales level in units and in sales dollars is required to earn an annual profit of $90,000?
Lindon Company is the exclusive distributor for an automotive product. The product sells $40 per unit and has a CM ratio of 30%. The company's fixed expenses are $180,000 per year. Required: 1. What are the variable expenses per unit? 2. Using the equation method: a. What is the break-even point in units and sales dollars? b. What sales level in units and in sales dollars is required to earn an annual profit of $60,000? c. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $4 per unit. What is the Company's new break-even point in units and in sales dollars? 3. Repeat (2) above using the unit contribution method.
Stratford Company distributes a lightweight lawn chair that sells for $15 per unit. Variable expenses are $6 per unit, and fixed expenses total $180,000 annually. Required: Answer the following independent questions: 1. What is the product’s CM ratio? 2. Use the CM ratio to determine the break-even point in sales dollars. 3. The company estimates that sales will increase by $45,000 during the coming year due to increased demand. By how much should net operating income increase? 4. Assume that the operating results for last year were as follows:Sales . . . . . . . . . . . . . . . . . . . . . . . $360,000Variable expenses. . . . . . . . . . . . . 144,000Contribution margin . . . . . . . . . . . . 216,000Fixed expenses . . . . . . . . . . . . . . . 180,000Net operating income . . . . . . . . . . $ 36,000Sales (13,500 units at $20 per unit) . . . . . . . $270,000Variable expenses . . . . . . . . . . . . . . . . . . . . 189,000Contribution margin . . . . . . . . . . . . . . . . . . .…
Lindon Company is the exclusive distributor for an automotive product selling for $22.00 per unit with a CM ratio of 30%. The company's fixed expenses are $105,600 per year and it plans to sell 17,400 units this year. Required: 1. What are the variable expenses per unit? Note: Round your "per unit" answer to 2 decimal places. 2. What is the break-even point in unit sales and in dollar sales? 3. What amount of unit sales and dollar sales is required to attain a target profit of $39,600 per year? 4. Assume by using a more efficient shipper, the company can reduce its variable expenses by $2.20 per unit. What is the company's new break-even point in unit sales and dollar sales? What dollar sales are required to attain a target profit of $39,600? 1. Variable expense per unit 2. Break-even point in units 2. Break-even point in dollar sales 3. Unit sales needed to attain target profit 3. Dollar sales needed to attain target profit 4. New break-even point in unit sales 4. New break-even point…
Q. 5) Samara Company is the exclusive distributor for a revolutionary bookbag. The productsells for $60 per unit and has a CM ratio of 40%. The company’s fixed expenses are $360,000 peryear. The company plans to sell 17,000 bookbags this year. Required:1. What are the variable expenses per unit?2. Using the equation method:a. What is the break-even point in units and in sales dollars?b. What sales level in units and in sales dollars is required to earn an annual profit of$90,000?c. Assume that through negotiation with the manufacturer the Samara Company is ableto reduce its variable expenses by $3 per unit. What is the company’s new break-evenpoint in units and in sales dollars?3. Repeat (2) above using the formula method.
Jasmine Incorporated sells a product for $61 per unit. Variable costs per unit are $31, and monthly fixed costs are $252,000. Answer the following questions: Required: a. What is the breakeven point in units? b. What unit sales would be required to earn a target profit of $162,000 ? c. Assuming Jasmine achieves the level of sales required in part b, what is the margin of safety in sales dollars?