Exercise 5-13 (Algo) Computing sales to achieve target income LO C2 Sunn Company manufactures a single product that sells for $208 per unit and whose variable costs are $156 per unit. The company's annual fixed costs are $806.000. Management targets an annual income of $1,300,000 (1) Compute the unit sales to earn the target income. Numerator: Denominator: (2) Compute the dollar sales to earn the target income. Numerator: Denominator: Units to Achieve Target Units to achieve target Dollars to Achieve Target Dollars to achieve target t

Exercise 5-13 (Algo) Computing sales to achieve target income LO C2 Sunn Company manufactures a single product that sells for $208 per unit and whose variable costs are $156 per unit. The company's annual fixed costs are $806.000. Management targets an annual income of $1,300,000 (1) Compute the unit sales to earn the target income. Numerator: Denominator: (2) Compute the dollar sales to earn the target income. Numerator: Denominator: Units to Achieve Target Units to achieve target Dollars to Achieve Target Dollars to achieve target t

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 29BEB: Sales Needed to Earn Target Income Chillmax Company plans to sell 3,500 pairs of shoes at 60 each in...

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Lotts Company produces and sells one product. The selling price is 10, and the unit variable cost is 6. Total fixed cost is 10,000. Required: 1. Prepare a CVP graph with Units Sold as the horizontal axis and Dollars as the vertical axis. Label the break-even point on the horizontal axis. 2. Prepare CVP graphs for each of the following independent scenarios: (a) Fixed cost increases by 5,000, (b) Unit variable cost increases to 7, (c) Unit selling price increases to 12, and (d) Fixed cost increases by 5,000 and unit variable cost is 7.
Refer to Cornerstone Exercise 3.4 for data on Dohini Manufacturing Companys purchasing cost and number of purchase orders. The controller for Dohini Manufacturing ran regression on the data, and the coefficients shown by the regression program are: Required: 1. Construct the cost formula for the purchasing activity showing the fixed cost and the variable rate. 2. If Dohini Manufacturing Company estimates that next month will have 430 purchase orders, what is the total estimated purchasing cost for that month? (Round your answer to the nearest dollar.) 3. What if Dohini Manufacturing wants to estimate purchasing cost for the coming year and expects 5,340 purchase orders? What will estimated total purchasing cost be? (Round your answer to the nearest dollar.) What is the total fixed purchasing cost? Why doesnt it equal the fixed cost calculated in Requirement 1?
Sales Needed to Earn Target Income Chillmax Company plans to sell 3,500 pairs of shoes at 60 each in the coming year. Variable cost is 35% of the sales price; contribution margin is 65% of the sales price. Total fixed cost equals 78,000 (includes fixed factory overhead and fixed selling and administrative expense). Required: 1. Calculate the sales revenue that Chillmax must make to earn operating income of 81,900 by using the point in sales equation. 2. Check your answer by preparing a contribution margin income statement based on the sales dollars calculated in Requirement 1.
West Island distributes a single product. The companys sales and expenses for the month of June are shown. Using the information presented, answer these questions: A. What is the break-even point in units sold and dollar sales? B. What is the total contribution margin at the break-even point? C. If West Island wants to earn a profit of $21,000, how many units would they have to sell? D. Prepare a contribution margin income statement that reflects sales necessary to achieve the target profit.
Question 1: A company produces and sells two products with the following costs: Product X Product Y Variable costs per Br. of sales Fixed costs per period Br.0.45 Br.1 212 000 Br.0.6 Br.1 212 000 Total sales revenue is currently generated by the two products in the following proportions: Product X 70% Product Y 30% Required: Calculate the break-even sales revenue per period, based on the sales mix assumed Prepare a profit–volume chart of the above situation for sales revenue up to Br.4 000 Show on the same chart the effect of a change in the sales mix to product X 50%, product Y 50%. Clearly indicate on the chart the break-even point for each situation. Of the fixed costs 455 000 are attributable to product X. Calculate the sales revenue required on product X in order to recover the attributable fixed costs and provide a netcontribution of Br.700 000 towards general fixed costs and profit.
Exercise 18-13 (Algo) Computing sales to achieve target income LO C2 Sunn Company manufactures a single product that sells for $145 per unit and whose variable costs are $87 per unit. The company's annual fixed costs are $916,400. Management targets an annual income of $1,450,000. (1) Compute the unit sales to earn the target income. Numerator: 1 1 Denominator: (2) Compute the dollar sales to earn the target income. Numerator: 1 1 Denominator: = || = = || Units to Achieve Target Units to achieve target 0 Dollars to Achieve Target Dollars to achieve target 0
Problem 10. Bulac Corporation manufactures and sells two products – Bangus and Tupig. Current revenue, costs and sales data on the two products appear below. Bangus P400 Tupig P600 Selling price per unit Variable cost per unit Number of units sold monthly 240 120 200 units 300 units Fixed costs and expenses are P704,000 per month. Required: a. Average contribution margin ratio. b. Composite breakeven point in units and in pesos. c. Allocation of composite breakeven point in units. d. Assuming the company increases its fixed costs and expenses by P140,800, how many units of Bangus and Tupig should be sold at breakeven point? e. Refer to the original data, assuming the sales mix between Bangus and Tupig is 500 units for Bangus and 300 units for Tupig, what is the new combined breakeven point in units and in pesos? f. Consider the original data, except that Pangasinan Company based its sales mix in units. Determine the following: i. Average UCM. ii. Composite BEP in units and in pesos.
PE 1. Use the following economic data to answer the numbered questions: Total fixed costs P1.8M Unit selling price P80.00 Unit variable cost P56.00 Indicate the effect on the following by one unit increase in sales volume: 1. Breakeven units Total peso sales 3. Total contribution margin 4. Operating profit 5. Total costs 2.
Unit sales (a) Selling price per unit Variable cost per unit Traceable fixed expense TB MC Qu. 12A-46 Woodridge Corporation manufactures numerous... Woodridge Corporation manufactures numerous products, one of which is called Alpha-32. The company has provided the following data about this product Multiple Choice $1,375,220 77,000 76.00 61.00 $1,323,000 $52.220 Help $ $ Management is considering increasing the price of Alpha-32 by 5%, from $76.00 to $79.80. The company's marketing managers estimate that this price hike would decrease unit sales by 5%, from 77,000 units to 73,150 units Assuming that the total traceable fixed expense does not change, what net operating income will product Alpha-32 earn at a price of $79.80 if this sales forecast is correct? Save & Exit
Multiproduct breakeven analysis and target profit, taxes Pursuit Company produces two products: Bric and Brac. The following table summarizes the products' details and planned unit sales for the upcoming period: Bric BrAc Sellingpriceperunt...........$S25$30 Variablecostperunit ... $14$17 Planned unit sales volume . . . . . . 800, 000 400,000 Pursuit Company has total fixed costs of $10 million and faces a tax rate of 30%. Required (a)What is Pursuit Company's expected profit at the planned level of sales? (b)Assuming a constant sales mix, what are the unit sales of Bric and Brac required for Pursuit Company to break even? (c) Assuming a constant sales mix, what are the unit sales of Bric and Brac required for Pursuit Company to earn an after-tax income of $910, 000 ?
Segment Reporting 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.
Question No.2 Menlo Company manufactures and sells a single product. The company’s sales and expenses for last quarter are as follows: Unit Cost $30 $12 $18 Total Cost $450,000 $180,000 $270,000 $216,000 $054,000 Sales. Less variable expenses.. Contribution margin. Less fixed expenses. Net operating income. Required: What is the B.E.P in units sold and in sales dollars? What is the total contribution at B.E.P? How many units must sold each quarter to earn a target profit of $90,000? Use the contribution margin method. Verify your answer by preparing a contribution format income statement at the target sales level. Refer to original data, compute the margin of safety in both dollars and %age terms. What is the company CM ratio? If sales increase by $50,000 per quarter by how much would you expect quarterly net operating income to increase?