Break-even sales and cost-volume-profit chartFor the coming year, Cleves Company anticipates a unit selling price of $98, a unit variable cost of $49, and fixed costs of $416,500.Required:1. Compute the anticipated break-even sales (units).416,500 units2. Compute the sales (units) required to realize a target profit of $171,500.units3. Construct a cost-volume-profit chart on paper, assuming maximum sales of 17,000 units within the relevant range. From your chart,indicate whether each of the following sales levels would produce a profit, a loss, or break-even.$1,166,200$1,038,800$833,000$627,200$499,800Determine the probable operating income (loss) if sales total 13,600 units. If required, use the minus sign to indicate a loss.

BEP is that point where there is no profit and no loss and it is the point at which both variable…

Answered: For the coming year, Cleves Company…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 3PA

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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?
Suppose a company finds that shipping cost is 3,560 each month plus 6.70 per package shipped. What is the cost formula for monthly shipping cost? Identify the independent variable, the dependent variable, the fixed cost per month, and the variable rate.
Sales Revenue Approach, Variable Cost Ratio, Contribution Margin Ratio Arberg Companys controller prepared the following budgeted income statement for the coming year: Required: 1. What is Arbergs variable cost ratio? What is its contribution margin ratio? 2. Suppose Arbergs actual revenues are 30,000 more than budgeted. By how much will operating income increase? Give the answer without preparing a new income statement 3. How much sales revenue must Arberg earn to break even? Prepare a contribution margin income statement to verify the accuracy of your answer. 4. What is Arbergs expected margin of safety? 5. What is Arbergs margin of safety if sales revenue is 380,000?
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.
Break-Even Sales and Cost-Volume-Profit Chart For the coming year, Cleves Company anticipates a unit selling price of $92, a unit variable cost of $46, and fixed costs of $299,000. Required: 1. Compute the anticipated break-even sales (units). units 2. Compute the sales (units) required to realize a target profit of $138,000. units 3. Construct a cost-volume-profit chart on paper, assuming maximum sales of 13,000 units within the relevant range. From your chart, indicate whether each of the following sales levels would produce a profit, a loss, or break-even. $837,200 Profit $745,200 Profit $598,000 Break-even $450,800 Loss Loss $358,800 4. Determine the probable operating income (loss) if sales total 10,400 units. If required, use the minus sign to indicate a loss. Income
Break-Even Sales and Cost-Volume-Profit Chart For the coming year, Cleves Company anticipates a unit selling price of $98, a unit variable cost of $49, and fixed costs of $588,000. Required: 1. Compute the anticipated break-even sales (units). units 2. Compute the sales (units) required to realize a target profit of $259,700. units 3. Construct a cost-volume-profit chart on paper, assuming maximum sales of 24,000 units within the relevant range. From your chart, indicate whether each of the following sales levels would produce a profit, a loss, or break-even. $1,646,400 $1,470,000 $1,176,000 $882,000 $705,600 4. Determine the probable operating income (loss) if sales total 19,200 units. If required, use the minus sign to indicate a loss.
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Break-Even Sales and Cost-Volume-Profit Chart For the coming year, Cleves Company anticipates a unit selling price of $106, a unit variable cost of $53, and fixed costs of $530,000. Required: 1. Compute the anticipated break-even sales (units). fill in the blank 1 units 2. Compute the sales (units) required to realize a target profit of $227,900. fill in the blank 2 units 3. Construct a cost-volume-profit chart, assuming maximum sales of 20,000 units within the relevant range. From your chart, indicate whether each of the following sales levels would produce a profit, a loss, or break-even. $1,484,000 $1,325,000 $1,060,000 $795,000 $636,000 4. Determine the probable income (loss) from operations if sales total 16,000 units. If required, use the minus sign to indicate a loss. Sfill in the blank
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ебоок Break-even sales and cost-volume-profit chart For the coming year, Cleves Company anticipates a unit selling price of $134, a unit variable cost of $67, and fixed costs of $629,800. Required: 1. Compute the anticipated break-even sales (units). units 2. Compute the sales (units) required to realize a target profit of $341,700. units 3. Construct a cost-volume-profit chart on paper, assuming maximum sales of 18,800 units within the relevant range. From your chart, indicate whether each of following sales levels would produce a profit, a loss, or break-even. $1,768,800 $1,581,200 $1,259,600 $951,400 $750,400 4. Determine the probable operating income (loss) if sales total 15,000 units. If required, use the minus sign to indicate a loss.
Break-Even Sales and Cost-Volume-Profit Chart For the coming year, Cleves Company anticipates a unit selling price of $106, a unit variable cost of $53, and fixed costs of $530,000. Required: 1. Compute the anticipated break-even sales (units).fill in the blank 1 units 2. Compute the sales (units) required to realize a target profit of $227,900.fill in the blank 2 units 3. Construct a cost-volume-profit chart, assuming maximum sales of 20,000 units within the relevant range. From your chart, indicate whether each of the following sales levels would produce a profit, a loss, or break-even. $1,484,000 $1,325,000 $1,060,000 $795,000 $636,000 4. Determine the probable income (loss) from operations if sales total 16,000 units. If required, use the minus sign to indicate a loss.

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