Sarah Allen owns and operates Blossom, a bakery that creates personalized birthday cakes for a child's first birthday. The cakes, which sell for $56 and feature an edible picture of the child, are shipped throughout the country. A typical month's results are as follows: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income $944,720 708,540 236,180 123,620 $112,560

Sarah Allen owns and operates Blossom, a bakery that creates personalized birthday cakes for a child's first birthday. The cakes, which sell for $56 and feature an edible picture of the child, are shipped throughout the country. A typical month's results are as follows: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income $944,720 708,540 236,180 123,620 $112,560

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter6: Business Expenses

Section: Chapter Questions

Problem 37P

See similar textbooks

Similar questions

Mary Smith owns and operates BlossomCakes, a bakery that creates personalized birthday cakes for a child's first birthday. The cakes, which sell for $40 and feature an edible picture of the child, are shipped throughout the country. A typical month's results are as follows: Sales revenue $760,000 Variable expenses 570,000 Contribution margin 190,000 Fixed expenses 105,000 Operating income $85,000
Julianna Abdallah owns and operates FirstCakes, a bakery that creates personalized birthday cakes for a child's first birthday. The cakes, which sell for $40 and feature an edible picture of the child, are shipped throughout the country. A typical month's results are as follows: Sales revenue $840,000 Variable expenses 630,000 Contribution margin 210,000 Fixed expenses 112,000 Operating income $ 98,000 a.What is FirstCakes' contribution margin per unit? b.What is FirstCakes' monthly breakeven point in units? c.What is FirstCakes' contribution margin ratio? d.What is FirstCakes' monthly breakeven point in sales dollars?
ABC operates a consignment shop where she sells clothes for women and children. The average number of consignments sold per month is 1,000. The average material cost and the selling price of each consignment are $8 and $20, respectively. The monthly fixed costs to run this business are given below: Rental cost: $750Utilities: $150Advertising: $35Insurance: $100Labor cost: $4,000 Using Excel spreadsheet / worksheet, determine Anna's profit. Attach excel solution.
Aziza is one of the skilled employees in kids toys factory. The below table shows the quantity of toys she produced each day of the week: Day SaturdaySundayMondayTuesdayWednesdayThursday Quantity produced 20 22 25 20 23 19 Note: Friday is the weekly holiday. If Aziza receives OMR 12 for each toy, what will be her gross pay? a. OMR 1,458 b. OMR 1,500 c. OMR 1,584 d. OMR 1,548
Amber, owner of Amber’s Flowers and Gifts, produces gift baskets for various special occasions. Each giftbasket includes fruit or assorted small gifts (e.g., a coffee mug, deck of cards, novelty cocoa mixes, scentedsoap) in a basket that is wrapped in colorful cellophane. Amber has estimated the following unit sales of thestandard gift basket for the rest of the year and for January of next year.September 260October 250November 270December 350January 170Amber likes to have 5% of the next month’s sales needs on hand at the end of each month. This requirement was met onAugust 31. Two materials are needed for each fruit basket:Fruit 2 poundsSmall Gifts 4 itemsThe materials inventory policy is to have 5% of the next month’s fruit needs on hand and 30% of the next month’sproduction needs of small gifts. (The relatively low inventory amount for fruit is designed to prevent spoilage.) Materialsinventory on August 31 met this company policy.1. Prepare a production budget for September,…
Maria's Food Service provides meals that nonprofit organizations distribute to handicapped and elderly people. The following is her forecasted income statement for April, when she expects to produce and sell 2,200 meals: Amount Per Unit Sales revenue $ 11,440 $ 5.20 Costs of meals produced 9,020 4.10 Gross profit $ 2,420 $ 1.10 Administrative costs 1,100 0.50 Operating profit $ 1,320 $ 0.60 Fixed costs included in this income statement are $3,124 for meal production and $440 for administrative costs. Maria has received a special request from an organization sponsoring a picnic to raise funds for the Special Olympics. This organization is willing to pay $3.10 per meal for 300 meals on April 10. Maria has sufficient idle capacity to fill this special order. These meals will incur all of the variable costs of meals produced, but variable administrative costs and total fixed costs will not be affected. Required: a. What…
Maria's Food Service provides meals that nonprofit organizations distribute to handicapped and elderly people. The following is her forecasted income statement for April, when she expects to produce and sell 2,900 meals: Amount Per Unit Sales revenue $ 17,110 $ 5.90 Costs of meals produced 12,905 4.45 Gross profit $ 4,205 $ 1.45 Administrative costs 2,320 0.80 Operating profit $ 1,885 $ 0.65 Fixed costs included in this income statement are $4,321 for meal production and $580 for administrative costs. Maria has received a special request from an organization sponsoring a picnic to raise funds for the Special Olympics. This organization is willing to pay $3.45 per meal for 300 meals on April 10. Maria has sufficient idle capacity to fill this special order. These meals will incur all of the variable costs of meals produced, but variable administrative costs and total fixed costs will not be affected. Required: a. What…
Christabella, daughter of John Milton, produces and sells self-help kits to siblings to put away differences between them so siblings can work towards common goals. Last year, Christabella sold 198,400 kits (units). The income statement for Christabella, for last year is as follows: Sales $992,000 Less: Variable expenses 545,600 Contribution margin $446,400 Less: Fixed expenses 180,000 Operating income $266,400 a. Compute the break-even point in units and in revenues. Compute the margin of safety in sales revenue for last year. b. Suppose that the selling price decreases by 8 percent. Will the break-even point increase or decrease? Recompute the break-even point in units. (Round up to the nearest whole unit.) c. Suppose that the variable cost per unit decreases by $0.20. Will the break-even point increase or decrease? Recompute the break-even point in units. (Round up to the nearest whole unit.) d. Can you predict whether the break-even point increases or decreases if both the selling…
Radien runs her own hot dog stand on the U of A campus. The monthly cost of the cart rental and business permit is $1,100. Raiden spends $2.50 on each hot dog sold, including bun and condiments. She sells each hot dog for $5.00. 1. What is the contribution margin per unit? 2. What is the contribution margin ratio? 3. Predict operating income for a month in which Raiden sells 1,300 hot dogs
Magnuson is considering buying an eight-harness loom so that she can weave with more intricate patterns in linen. The new loom costs $1,000 and would be depreciated $20 per month. Her bank has agreed to lend her $1,000 at 18% interest per year, $200 payment of principal, plus accrued interest payable each December 31. Magnuson believes she can weave 15 linen place mat sets in time for the Christmas rush if she does not weave any cotton mats. She predicts that each linen set will sell for $50. Linen costs $18 per set. Magnuson's supplier will sell her linen on credit, payable December 31. Magnuson plans to keep her old loom whether or not she buys the new loom. The balance sheet for her weaving business at August 31, 2016, is as follows: Assets Current Assets: Cash Inventory of cotton Total Current Assets Property, Plant, and Equipment: Loom Less: Accumulated Depreciation Total PP&E Total Assets ANNE MAGNUSON, WEAVER Balance Sheet August 31, 2016 $25 175 200 500 (240) 260 $ 460 Current…
How do you answer this question? Roxy the candle maker Roxy makes and sells scented candles in her shop and on-line. She also caters for functions such as parties, weddings etc. The candles cost $5 to make, and sell for $12. Roxy buys in the raw materials the month before she sells the candles. She pays a deposit of 20% when she orders and the rest the following month At the start of the year she owed $1,000 to supplier for the previous month Her customers pay 75% in the month of purchase and 25% the following month She pays rent of $1,000 on the shop in cash during the month before it is due She pays cash wages of $500 a month during the month Her other running costs are $900 a month, but this includes $200 for depreciation of the candle making machine In month 4 in the forthcoming year she intends to invest $5,000…
Maria's Food Service provides meals that nonprofit organizations distribute to handicapped and elderly people. The following is her forecasted income statement for April, when she expects to produce and sell 4, 000 meals: Amount Per Unit Sales revenue $ 28,000 $7.00 costs of meals produced 20,000 5.00 Gross Profit $ 8,000 $ 2.00 Administrative costs 3,200 .08 Operating profit $ 4,800 $ 1.20 Fixed costs included in this income statement are $6,400 for meal production and $800 for administrative costs. Maria has received a special request from an organization sponsoring a picnic to raise funds for the Special Olympics. This organization is willing to pay $4.00 per meal for 300 meals on April…