famm
docx
keyboard_arrow_up
School
Centennial College *
*We aren’t endorsed by this school
Course
701
Subject
Accounting
Date
Nov 24, 2024
Type
docx
Pages
2
Uploaded by SuperHumanIce8848
The following is Arkadia Corporation's contribution format income statement for last
month:
Sales
$1,200,000
Less: variable expenses
800,000
Contribution margin
400,000
Less: fixed expenses
300,000
Operating income
$100,000
The company has no beginning or ending inventories and produced and sold 20,000
units during the month.
Required:
a) What is the company's contribution margin ratio?
b) What is the company's break-even in units?
c) If sales increase by 100 units, by how much should operating income increase?
d) How many units would the company have to sell to attain target operating income
of $125,000?
e) What is the company's margin of safety in dollars?
f) What is the company's degree of operating leverage?
g) If the tax rate is 30%, how many units must be sold to attain an after tax profit of
$84,000?
The following monthly budgeted data are available for the International Company:
Product A
Product B
Product C
Sales
$500,000
$300,000
$900,000
Variable expenses
300,000
210,000
720,000
Contribution margin
$200,000
$90,000
$180,000
Budgeted operating income for the month is $220,000.
Required:
a) Calculate the break-even sales for the month.
b) Calculate the margin of safety.
c) Calculate the degree of operating leverage.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
Related Documents
Related Questions
The following is Specter Corporation's contribution format income statement for last month:Sales $1,200,000Less variable expenses 800,000Contribution margin 400,000Less fixed expenses 300,000Net income $100,000The company has no beginning or ending inventories and produced and sold 20,000 units duringthe month.Required:a. What is the company's contribution margin ratio? b. What is the company's break-even in units? c. If sales increase by 100 units, by how much should net income increase?
arrow_forward
Last month when Holiday Creations, Inc., sold 41,000 units, total sales were $302,000, total variable expenses were $256,700, and
fixed expenses were $36,900.
Required:
1. What is the company's contribution margin (CM) ratio?
2. What is the estimated change in the company's net operating income if it can increase total sales by $2,500? (Do nòt round
intermediate calculations.)
1. Contribution margin ratio
%
2. Estimated change in net operating income
arrow_forward
Tt2.
arrow_forward
Last month the Blank Inc. had sales of 5,000 units sold for P40 each. The total variable expenses were P120,000, and fixed costs were P65,000.
Required:
a. What is the company’s contribution margin (CM) ratio?
b. Estimate the change in the company’s net operating income if it were to increase its total sales by P8,000.
arrow_forward
Menlo Company distributes a single product. The company’s sales and expenses for last month follow:
Total
Sales P450,000
Variable expenses 180,000
Contribution margin 270,000
Fixed expenses 216,000
Net operating income P 54,000
Units sold is 15,000 units
Required:
a. What is the break-even point in units sold and in sales dollars?
b. Without resorting to computations, what is the total contribution margin at the break-even point?
c. How many units would have to be sold each month to earn a target profit of P90,000? Verify your answer by preparing a contribution format income statement at the target sales level.
d. Refer to the original data. Compute the company’s margin of safety in both dollar and percentage terms.
arrow_forward
Whirly Corporation's contribution format income statement for the most recent month is shown below:
Per Unit
$34.00
19.00
126,000 $ 15.00
54,700
$ 71,300
Sales (8,400 units)
Variable expenses
Contribution margin
Fixed expenses
Net operating income
Required:
(Consider each case independently):
Total
$ 285,600
159,600
1. What would be the revised net operating income per month if the sales volume increases by 50 units?
2. What would be the revised net operating income per month if the sales volume decreases by 50 units?
3. What would be the revised net operating income per month if the sales volume is 7,400 units?
1. Revised net operating income
2. Revised net operating income
3. Revised net operating income
+
arrow_forward
Menlo Company distributes a single product. The company’s sales and expenses for last month follow:
Required:1. What is the monthly break-even point in unit sales and in dollar sales?2. Without resorting to computations, what is the total contribution margin at the break-even point?3. How many units would have to be sold each month to attain a target profit of $90,000? Verify your answer by preparing a contribution format income statement at the target sales level.4. Refer to the original data. Compute the company’s margin of safety in both dollar and percentage terms.5. What is the company’s CM ratio? If sales increase by $50,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?
arrow_forward
Last month when Holiday Creations, Incorporated, sold 44,000 units, total sales were $176,000, total variable expenses were
$144,320, and fixed expenses were $39,300.
Required:
1. What is the company's contribution margin (CM) ratio?
2. What is the estimated change in the company's net operating income if it can increase sales volume by 500 units and total sales by
$2,000? (Do not round intermediate calculations.)
X Answer is not complete.
1. Contribution margin ratio
2. Estimated change in net operating income
18
%
arrow_forward
The following is camp hill corporation solving this general accounting question
arrow_forward
I Need Answer
arrow_forward
Vishnu
arrow_forward
attached question
arrow_forward
Please provide the solution to this general accounting question with accurate financial calculations.
arrow_forward
SEE MORE QUESTIONS
Recommended textbooks for you
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College

Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning

Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Related Questions
- The following is Specter Corporation's contribution format income statement for last month:Sales $1,200,000Less variable expenses 800,000Contribution margin 400,000Less fixed expenses 300,000Net income $100,000The company has no beginning or ending inventories and produced and sold 20,000 units duringthe month.Required:a. What is the company's contribution margin ratio? b. What is the company's break-even in units? c. If sales increase by 100 units, by how much should net income increase?arrow_forwardLast month when Holiday Creations, Inc., sold 41,000 units, total sales were $302,000, total variable expenses were $256,700, and fixed expenses were $36,900. Required: 1. What is the company's contribution margin (CM) ratio? 2. What is the estimated change in the company's net operating income if it can increase total sales by $2,500? (Do nòt round intermediate calculations.) 1. Contribution margin ratio % 2. Estimated change in net operating incomearrow_forwardTt2.arrow_forward
- Last month the Blank Inc. had sales of 5,000 units sold for P40 each. The total variable expenses were P120,000, and fixed costs were P65,000. Required: a. What is the company’s contribution margin (CM) ratio? b. Estimate the change in the company’s net operating income if it were to increase its total sales by P8,000.arrow_forwardMenlo Company distributes a single product. The company’s sales and expenses for last month follow: Total Sales P450,000 Variable expenses 180,000 Contribution margin 270,000 Fixed expenses 216,000 Net operating income P 54,000 Units sold is 15,000 units Required: a. What is the break-even point in units sold and in sales dollars? b. Without resorting to computations, what is the total contribution margin at the break-even point? c. How many units would have to be sold each month to earn a target profit of P90,000? Verify your answer by preparing a contribution format income statement at the target sales level. d. Refer to the original data. Compute the company’s margin of safety in both dollar and percentage terms.arrow_forwardWhirly Corporation's contribution format income statement for the most recent month is shown below: Per Unit $34.00 19.00 126,000 $ 15.00 54,700 $ 71,300 Sales (8,400 units) Variable expenses Contribution margin Fixed expenses Net operating income Required: (Consider each case independently): Total $ 285,600 159,600 1. What would be the revised net operating income per month if the sales volume increases by 50 units? 2. What would be the revised net operating income per month if the sales volume decreases by 50 units? 3. What would be the revised net operating income per month if the sales volume is 7,400 units? 1. Revised net operating income 2. Revised net operating income 3. Revised net operating income +arrow_forward
- Menlo Company distributes a single product. The company’s sales and expenses for last month follow: Required:1. What is the monthly break-even point in unit sales and in dollar sales?2. Without resorting to computations, what is the total contribution margin at the break-even point?3. How many units would have to be sold each month to attain a target profit of $90,000? Verify your answer by preparing a contribution format income statement at the target sales level.4. Refer to the original data. Compute the company’s margin of safety in both dollar and percentage terms.5. What is the company’s CM ratio? If sales increase by $50,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?arrow_forwardLast month when Holiday Creations, Incorporated, sold 44,000 units, total sales were $176,000, total variable expenses were $144,320, and fixed expenses were $39,300. Required: 1. What is the company's contribution margin (CM) ratio? 2. What is the estimated change in the company's net operating income if it can increase sales volume by 500 units and total sales by $2,000? (Do not round intermediate calculations.) X Answer is not complete. 1. Contribution margin ratio 2. Estimated change in net operating income 18 %arrow_forwardThe following is camp hill corporation solving this general accounting questionarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax CollegeCornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage LearningManagerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College

Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning

Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning