3-36. CONTRIBUTION MARGIN, GROSS MARGIN, AND MARGIN OF SAFETY. Bella Beauty manufactures and sells a face cream to small specialty stores in the greater Los Angeles area. It presents the monthly operating income statement shown here to George Sanchez, a potential investor in the business. Help Mr. Sanchez understand Bella Beauty's cost structure. Required 1. Recast the income statement to emphasize contribution margin. 2. Calculate the contribution margin percentage and breakeven point in units and revenues for June 2020. 3. What is the margin of safety (in units) for June 2020? 4. If sales in June were only 9,500 units and Bella Beauty's tax rate is 30%, calculate its net income.

3-36. CONTRIBUTION MARGIN, GROSS MARGIN, AND MARGIN OF SAFETY. Bella Beauty manufactures and sells a face cream to small specialty stores in the greater Los Angeles area. It presents the monthly operating income statement shown here to George Sanchez, a potential investor in the business. Help Mr. Sanchez understand Bella Beauty's cost structure. Required 1. Recast the income statement to emphasize contribution margin. 2. Calculate the contribution margin percentage and breakeven point in units and revenues for June 2020. 3. What is the margin of safety (in units) for June 2020? 4. If sales in June were only 9,500 units and Bella Beauty's tax rate is 30%, calculate its net income.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Answer the questions ASAP.
Lucido products markets two computer games: claimjumper and makeover. A contribution format income statement for a recent month for the two games appears in top of picture. prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of sales for the two products.
Define the following terms with example. RELEVANT COSTSUNK COSTOPPORTUNITY COSTAVOIDABLE AND UNAVOIDABLE COSTINCREMENTAL COSTBREAK-EVEN POINT(B)KPR manufactures installs lawn sod in home yards. The company’s most recent monthly contribution format income statement follows: In RsAmount Sales 80,000 Variable expenses 32,000 Contribution margin 48,000 Fixed expenses -38,000 Net operating income 10,000 Required:Compute the company’s degree of operating leverage.Using the degree of operating leverage, estimate the impact on net operating income of a 5% increase in sales.Verify your estimate from part (2) above by constructing a new contribution format income statement for the company assuming a 5% increase in sales.
You are required show ALL supportingworkings where necessary and state any assumption(s) made. _C-V-P AnalysisGreek Manufacturing Company produces and sells a line of product that are sold usually all year round. Thecompany has a maximum production capacity of 100,000 units per year. Operating at normal capacity, thebusiness earned Operating Income of $600,000 in 2020. The following cost data has been prepared for theyear ended December 31, 2020.Selling price per unit……………………………………… $50.00Production Costs:Direct Materials …………………………………. $10.00Direct Labour ……………………………………. $8.00Variable Manufacturing Overhead ……………. $7.00Fixed Manufacturing Overhead…………....................... $450,000Fixed Selling & Administrative Expenses……………… $300,000Variable selling expense per unit ………………………. $10.00Required: a. Using the equation method calculate the normal capacity of the business b.Assuming sales equal to the normal capacity calculated in (a) above, prepare a contribution margin income…
I. Cost Behavior and Estimation (HP 6) The owners of Mormont Co., Jorah and Lyanna, are expecting sales for August, 2019 to be 250,000 units. Information about Mormont's Sales and costs over the past three months, are as follows: Units Sold Sales Cost of Goods Sold Wage & Salary Expense Admin Expense May O 200,000 300,000 $3,450,000 $5,175,000 $1,575,000 $2,312,500 $950,000 $975,000 $1,300,000 $1,600,000 June July 500,000 $8,625,000 $3,787,500 $1,925,000 $2,500,000 Required: Based on the information provided, provide a projected income statement, using the contribution margin format. 5
How do I determine the company's total contribution margin, contribution margin per service call, and contribution margin ratio when 50 service calls are made in the month of June? Problem E21-23
How do I complete the table on question 2.2 ?
Lamphere Lawn Care provides lawn and gardening services. The price of the service is fixed at a flat rate for each service, and most costs of providing the service are the same, given the similarity in the lawns and lots. The owner budgets income by estimating two factors that fluctuate with the economy: the contribution margin associated with each service call and the number of customers who will request lawn service. Looking at next year, the owner develops the following estimates of contribution margin (price less variable cost of the service, including labor) and the estimated number of service calls. Although the owner understands that it is not strictly true, the owner assumes that the cost of fuel and the number of customers are independent. Contribution Margin per Service Call Scenario Excellent Fair Poor (Price - $ 50 Variable cost) Service Calls 40 12 Number of 10,950 8,500 6,200 In addition to the variable costs of service, the owner estimates that other costs are $63,000…
Required: Laguna Print makes advertising hangers that are placed on doorknobs. It charges $0.18 and estimates its variable cost to be $0.16 per hanger. Laguna's total fixed cost is $2,260 per month, which consists primarily of printer depreciation and rent. Calculate the number of advertising hangers that Laguna must sell in order to break even. Note: Round your intermediate calculation to 2 decimal places and final answer to the nearest whole number. Break-even Hangers
Please do not give solution in image format ? And Fast Answering Please ? And Explain Proper Step by Step.