3-39 CVP analysis, medical sector. Yahama Medical Centre operates a medical surgery in Japan that specializes in the diagnosis and treatment of hay fever allergies. The firm's budget for next year is as follows: Number of beds available In-patient days In-patient fees 80 per day 26,000 per annum ¥1,300,000 Direct supplies Variable Costs ¥ 100,000 Fixed Costs Total Costs ¥ 100,000 Direct salaries Patient service O/H Administration Total costs 800,000 800,000 58,000 ¥102,000 160,000 108,000 ¥1,066,000 150,000 ¥252,000 258,000 ¥1,318,000 1. Calculate the contribution margin ratio. 2. Compute the breakeven point in both in-patient days and in-patient fees. 3. Compute the margin of safety ratio if the clinic operates at full capacity. 4. Suppose the direct salaries were increased to ¥826,000 and total variable costs increased to ¥1,092,000, compute the breakeven point in in-patient days if all matters not specified remain the same. 5. Suppose the fixed patient service overheads increase to ¥120,000 and total fixed costs increases to ¥270,000, compute the breakeven point, if all other matters remain the same.

3-39 CVP analysis, medical sector. Yahama Medical Centre operates a medical surgery in Japan that specializes in the diagnosis and treatment of hay fever allergies. The firm's budget for next year is as follows: Number of beds available In-patient days In-patient fees 80 per day 26,000 per annum ¥1,300,000 Direct supplies Variable Costs ¥ 100,000 Fixed Costs Total Costs ¥ 100,000 Direct salaries Patient service O/H Administration Total costs 800,000 800,000 58,000 ¥102,000 160,000 108,000 ¥1,066,000 150,000 ¥252,000 258,000 ¥1,318,000 1. Calculate the contribution margin ratio. 2. Compute the breakeven point in both in-patient days and in-patient fees. 3. Compute the margin of safety ratio if the clinic operates at full capacity. 4. Suppose the direct salaries were increased to ¥826,000 and total variable costs increased to ¥1,092,000, compute the breakeven point in in-patient days if all matters not specified remain the same. 5. Suppose the fixed patient service overheads increase to ¥120,000 and total fixed costs increases to ¥270,000, compute the breakeven point, if all other matters remain the same.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Gold Star Rice, Limited, of Thailand exports Thai rice throughout Asia. The company grows three varieties of rice-White, Fragrant, and Loonzain. Budgeted sales by product and in total for the coming month are shown below: Percentage of total sales Sales Variable expenses Contribution margin Fixed expenses Net operating income White 48% $ 374,400 112,320 $ 262,080 Fragrant 20% 100% $ 156,000 30% 124,800 70% $ 31,200 Product 100% 80% 20% Loonzain 32% $ 249,600 137, 280 $ 112,320 100% 55% 45% Total 100% $ 780,000 374,400 405, 600 228,800 $ 176,800 Dollar sales to break-even = Fixed expenses ÷ CM ratio = $228,800 ÷ 0.52 = $440,000 As shown by these data, net operating income is budgeted at $176,800 for the month and the estimated break-even sales is $440,000. Assume actual sales for the month total $780,000 as planned; however, actual sales by product are White, $249,600; Fragrant, $312,000; and Loonzain, $218,400. Required: 1. Prepare a contribution format income statement for the month…
Gold Star Rice, Limited, of Thailand exports Thai rice throughout Asia. The company grows three varieties of rice-White, Fragrant, and Loonzain. Budgeted sales by product and in total for the coming month are shown below: Percentage of total sales Sales Variable expenses Contribution margin Fixed expenses Net operating income White 20% $ 150,000 108,000 $ 42,000 Fragrant 52% 100% $ 390,000 72% 28% $ 312,000 78,000 Required 1 Required 2 Product Loonzain 28% Complete this question by entering your answers in the tabs below. 100% $ 210,000 20% 84,000 80% $ 126,000 Required: 1. Prepare a contribution format income statement for the month based on the actual sales data. 2. Compute the break-even point in dollar sales for the month based on your actual data. 100% 40% 60% Tota 100% Dollar sales to break-even = Fixed expenses / CM ratio = $449,280 / 0.64 = $702,000 As shown by these data, net operating income is budgeted at $30,720 for the month and the estimated break-even sales is $702,000.…
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