40. Jupiter Inc. reports the following information for August: Sale revenue. Variable costs.. Fixed costs... $800,000 200,000 100,000 Calculate the contribution margin for the month of August.
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- The following is last month's contribution format income statement: Sales (8 000 units) ................ R800 000 Less variable expenses ............. 500 000 Contribution margin ................. 300 000 Less fixed expenses ................. 200 000 Net income .......................... R100 000 What is the company's degree of operating leverage? A. 0.125 B. 8.0 C. 3.0 D. 0.333Below is a contribution format income statement for last month when Hill Corp. made and sold 10,000 units. Sales (10,000 units) $1,000,000 Variable Expense.... ....600,000 Contribution Margin............... ..400,000 ..250,000 ...150,000 Fixed Expense...... Net operating income..…...... If sales increase by 100 units, net operating income should increase by: Numeric Response(A) Explain in detail the meaning of Contribution Margin. (B) Robeson Company estimates it will produce and sell 3,000 units next month. Data on costs follows: Per unit costs: Selling price…………………………………………………… $11.00 Variable manufacturing costs………………………………… $5.75 Variable selling costs…………………………………………. $0.25 Total costs: Fixed manufacturing costs…………………………………....... $4,500 Fixed selling costs……………………………………………... $ 500 REQUIRED : What is the breakeven point in units? What is the breakeven point in sales dollars? iii. What is the expected operating income for next month? What is the margin of safety in dollars?
- The following is last month's contribution format income statement: Sales (12 000 units) ................ R1 200 000 Less variable expenses .............. 700 000 Contribution margin ................. 500 000 Less fixed expenses ................. 300 000 Net income .......................... R 200 000 What is the company's margin of safety percentage to the nearest whole percent? A. 42% B. 17% C. 20% D. 40%Hudson Co. reports the contribution margin income statement for 2019 below. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (9,600 units at $225 each) . . . . . . . . . . . . . . . . . . . . $2,160,000 Variable costs (9,600 units at $180 each) . . . . . . . . . . . . . 1,728,000 Contribution margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 432,000 Fixed costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324,000 Pretax income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 108,000 1. Compute the company’s degree of operating leverage for 2019. 2. If sales decrease by 5% in 2020, what will be the company’s pretax income? 3. Assume sales for 2020 decrease by 5%. Prepare a contribution margin income statement for 2020.Prepare a contribution margin format income statement; calculate breakeven point Presented here is the income statement for Fairchild Co. for March:Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $80,000Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,000Gross profi t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $38,000Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,000Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,000Based on an analysis of cost behavior patterns, it has been determined that the company’s contribution margin ratio is 30%.Required:a. Rearrange the preceding income statement to the contribution margin format.b. Calculate…
- Okabee Enterprises is the distributor for two products, Model A100 and Model B900. Monthly sales and the contribution margin ratios for the two products follow: Product Model A100 Model B900 TotalSales . . . . . . . . . . . . . . . . . . . . . . . . $700,000 $300,000 $1,000,000Contribution margin ratio . . . . . . . . . 60% 70% ? The company’s fixed expenses total $598,500 per month. Required: 1. Prepare a contribution format income statement for the company as a whole. 2. Compute the break-even point for the company based on the current sales mix. 3. If sales increase by $50,000 per month, by how much would you expect net operating income to increase? What are your assumptions?Prepare a contribution margin format income statement; answer what-ifquestions Shown here is an income statement in the traditional format for a firm with a sales volume of 15,000 units:Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $105,000Cost of goods sold ($8,000 1 $3.60/unit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62,000Gross profi t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 43,000Operating expenses:Selling ($1,500 1 $0.80/unit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,500Administration ($4,000 1 $0.50/unit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,500Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 18,000Required:a. Prepare an income statement in the contribution margin format.b. Calculate the…Cleary Company manufactures and sells a single product. The company's sales and expenses for last year follow: Total Per Unit % Sales. . . . . . . . . . . . . . . . . . . $100,000 $20 ? Variable expenses. . . . . . . ? ? ? Contribution margin. . . . . . ? ? ? Fixed expenses. . . . . . . . . . 12,000 Operating income. . . . . . . . $28,000 1. Fill in the missing numbers in the table. Use the following questions to help fill in the missing numbers in the table: a. What is the total contribution margin? b. What is the total variable expense? c. How many units were sold? d. What is the per-unit variable expense? e. What is the per-unit contribution margin? 2. Answer the following questions about breakeven analysis: a. What is the breakeven point in units? b. What is the breakeven point in sales dollars? 3. Answer the following questions about target profit analysis and…
- Prepare a contribution margin format income statement; answer what-ifquestions Shown here is an income statement in the traditional format for a firm with a sales volume of 20,000 units. Cost formulas also are shown:Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $200,000Cost of goods sold ($36,000 1 $5.20/unit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140,000Gross profi t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 60,000Operating expenses:Selling ($9,200 1 $0.30/unit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,200Administration ($18,800 1 $0.50/unit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,800Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 16,000Required:a. Prepare an income statement in the…5.) Emerald, Inc, produces a single product. The results of the company's operations for a typical month are summarized in contribution format as follows: Sales................................... $540,000 Variable expenses.............. 360,000 Contribution margin.......... 180,000 Fixed expenses................... 120,000 Net operating income........ $ 60,000 The company produced and sold 120,000 kilograms of product during the month. There was no beginning or ending inventories. Required: 5.1) Given the present situation, compute The break-even sales in kilograms. The break-even sales in dollars. The sales in kilograms that would be required to produce net operating income of $90,000. The margin of safety in dollars. 5.2) An important part of processing is performed by a machine that is currently being leased for $20,000 per month. The company has been offered an arrangement whereby it would pay $0.10 royalty per kilogram…1. Pantok Manufacturing, most recent income statement follows: Total P208,000 144,000 Sales (8,000 units) Variable expenses.... Contribution margin.. Fixed expenses....... Net operating Income..... Per unit P 26.00 18.00 64,000 P 8.00 .56,000 ..P 8,000 Required: Prepare a new contribution format income statement under each of the following conditions (consider each case independently): a. The sales volume increases by 50 units. b. The sales volume declines by 50 units. c. The sales volume is 7,000 units.
