1. Summer Company has annual fixed costs of P90,000. This year, it recorded profit of P30,000 which is 10% of its sales. In the coming year, sales volume is expected to increase by P200,000 and the profit ratio will go up to 22%. What is Summer's break even sales ratio in the coming year? (Show forluma and solution) a. 45% b. 40% c. 55% d. 22%

1. Summer Company has annual fixed costs of P90,000. This year, it recorded profit of P30,000 which is 10% of its sales. In the coming year, sales volume is expected to increase by P200,000 and the profit ratio will go up to 22%. What is Summer's break even sales ratio in the coming year? (Show forluma and solution) a. 45% b. 40% c. 55% d. 22%

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Yellow Company's variable expenses are 30% of sales and have monthly fixed expenses of $21,000. The…

A: MARGIN OF SAFETYSales Above the Break-Even Point is Called Margin of Safety Sales.Margin of Safety…

Q: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising…

A: Contribution means the difference between the selling price and variable cost .

Q: i know the answer but i want to know the steps. thank you

A: given information: Amount ($) % Selling price per unit $10 100 Variable cost per unit $4 40%…

Q: Planet of the Grapes, Inc. makes a single product that it sells for $40 each. Variable costs are $15…

A: In order to calculate desired sales for a required level of profit: Desired sales = (Fixed cost +…

Q: The costs and revenue projections for a new product are estimated. What is the estimated profit at a…

A: The contribution margin is calculated as difference between sales and variable costs. The break…

Q: Margin of Safety Yellow Sticker Company's variable expenses are 40% of sales. The company has…

A: Lets understand the basics. Margin of safety is a all the sales over break even point. Formula (For…

Q: CC (Caleb Clark) enterprises forecasts 2021 sales of $400,000. The selling price per unit is $75.…

A: Total sales = $4,00,000 Sale price per unit = 75…

Q: Sunrise Company sells 3, 650 frying pans per year. The owner has invested $80, 000 in the business…

A: The income statement is one of the financial statements that is prepared at the end of the year to…

Q: Margin of Safety Yellow Sticker Company’s variable expenses are 40% of sales. The company has…

A: The margin of safety is a tool of cost volume profit analysis. It can be calculated by deducting…

Q: Profit-Volume Chart For the coming year, Loudermilk Inc. anticipates fixed costs of $600,000, a unit…

A: Answer a. Maximum Operating Loss will occur when sale is $0. If Sale is $0, then Variable Cost will…

Q: What is the expected operating income for the next month? Select one:

Q: Sheridan Company has a new product going on the market next year. The following data are projections…

A: Desired profit :— It is calculated by multiplying investment amount with ROI. Markup percentage…

Q: Jacob Arrell Corporation has sales revenue of $9,500,000. The company's fixed costs total…

A: There is ratio called combined leverage which is the ratio of % change in EPS with respect to %…

Q: Last year Collins Company introduced a new product and sold 20,000 units of it at a price of $50 per…

A: 1. CM Ratio= It is Contribution margin ratio CM Ratio= Contribution/Sales Contribution =…

Q: Many Happy Returns, Inc., prepares income tax returns. It prepares 50,000 returns per year. Selling…

A: Contribution means the difference between the selling price and variable cost . Fixed cost when…

Q: Last year Minden Company introduced a new product and sold 15,000 units at a price of $74 per unit.…

A: The question is based on the concept of Cost Accounting.Net operating profit or loss is the…

Q: If KFC has a 10.85% increase in sales, its EBIT will increase by __________. Assume that KFC…

A: Degree of Operating leverage measure the percentage change in operating income (EBIT) for a given…

Q: and the average fixed expense per month is $12,000. On average 2,000 tables are sold at each month.…

A: MARGINAL COSTING INCOME STATEMENT Marginal Costing Income Statement is One of the Important Cost…

Q: 6. Dexter Corporation forecast the following units and selling prices. Year 1 Year 2 1,000 $10 1,500…

A: The budget is prepared to estimate the requirements for the period. The production budget is…

Question

(Show forluma and solution)

a. 45%

b. 40%

c. 55%

d. 22%

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Solve this problem
Info in images
The Rachel Company has sales of $450,000, and the break-even point in sales dollars is $292,500. Determine the company's margin of safety as a percent of current sales.fill in the blank 1 %
6. . At a furniture factory, the average selling price of a table is $18, the average variable expense per table is $ 9, and the average fixed expense per month is $ 12,000. On average 2, 000 tables are sold at each month. If sales increase by 20%, by how much should net operating income increase? A. $ 7,200 B. $ 10,000 C. $8,000 D. $3,160
Last year Minden Company introduced a new product and sold 25, 300 units of it at aprice of $99 per unit. The product's variable expenses are $69 per unit and its fixedexpenses are $837,300 per year. Required: 1. What was this product's net operatingincome (loss) last year? 2. What is the product's break - even point in unit sales anddollar sales? 3. Assume the company has conducted a marketing study that estimates itcan increase annual sales of this product by 5.000 units for each $2 reduction in itsselling price. If the company will only consider price reductions in increments of $2 (e.g$68, $66, etc.), what is the maximum annual profit that it can earn on this product?What sales volume and selling price per unit generate the maximum profit? 4. Whatwould be the break - even point in unit sales and in dollar sales using the selling pricethat you determined in requirement 3?
Last year company A introduced a new product and sold 25,900 units at $97.00 per unit. The product variable expense $67.00 per unit with a fixed price expense of $835,500 per year. a. What is the product's net income or loss last year? b. What is the product break-even point in unit sales and dollar sales? c. Assume the company has conducted a market study that estimates it can increase sales by 5,000 units for each $2.00 reduction in its selling price. If the company would only consider increments of $2.00(e.g. $68,$66, etc) What is the maximum annual profit that can be earned on this product? What sales volume and selling price per unit generate the maximum profit? d. What would be the break-even point in unit sales and dollar sales using the selling price that was determined in the required letter c above? Thank you,
Margin of Safety Yellow Sticker Company's variable expenses are 40% of sales. The company has monthly fixed expenses of $15,000 and sells each unit for $0.50. The monthly target operating income is $3,750. a. What is the monthly margin of safety in dollars if Yellow Sticker Company achieves its operating income goal? $0 in dollars b. What is the monthly margin of safety in units if Yellow Sticker Company achieves its operating income goal? 0 units
Strong Key Pte. Ltd, manufactures a key for houses with the selling price $7/per unit. Each key has variable cost per unit $4.- Fixed Cost $60.000/per year. Interest expense for obligation is $15.000,- per year and divided for preferred stock every year is $7.500. Annual sales for this year are 40.000 units. Tax is 30%. a. Calculate and make a graph BEP Strong Key Pte.Ltd. b. Calculate EBIT and Earning Available for Common Stockholders. c. Calculate DOL, DFL, and DTL. d. If Strong Key can add sales in units 20.000 units and become 60.000 units, what is the new EBIT?
Accounting Question
D) Brolin Company sells a single product. The product has a selling price of $50 and variable expenses of 80% of sales. If the company's fixed expenses total $150,000 per year, what is the company's break-even point in sales dollars? per unit $750,000 A) $187,500 B) $15,000 C) $3,750 D) Page 2 of 4 O 48°F Sunny re to search