3-41 CVP analysis, income taxes. (CMA, adapted) J.T. Brooks and Company, a manufacturer of qual- ity handmade walnut bowls, has had a steady growth in sales for the past 5 years. However, increased competition has led Mr. Brooks, the president, to believe that an aggressive marketing campaign will be neces- sary next year to maintain the company's present growth. To prepare for next year's marketing campaign, the company's controller has prepared and presented Mr. Brooks with the following data for the current year, 2020: Variable cost (per bowl) Direct materials Direct manufacturing labor Variable overhead (manufacturing, marketing, distribution, and customer service) Total variable cost per bowl Fixed costs Manufacturing Marketing, distribution, and customer service Total fixed costs Selling price Expected sales, 22,000 units Income tax rate 1. What is the projected net income for 2020? S 3.00 8.00 7.50 $ 18.50 $ 20,000 194,500 $214,500 $ 35.00 $770,000 40%

3-41 CVP analysis, income taxes. (CMA, adapted) J.T. Brooks and Company, a manufacturer of qual- ity handmade walnut bowls, has had a steady growth in sales for the past 5 years. However, increased competition has led Mr. Brooks, the president, to believe that an aggressive marketing campaign will be neces- sary next year to maintain the company's present growth. To prepare for next year's marketing campaign, the company's controller has prepared and presented Mr. Brooks with the following data for the current year, 2020: Variable cost (per bowl) Direct materials Direct manufacturing labor Variable overhead (manufacturing, marketing, distribution, and customer service) Total variable cost per bowl Fixed costs Manufacturing Marketing, distribution, and customer service Total fixed costs Selling price Expected sales, 22,000 units Income tax rate 1. What is the projected net income for 2020? S 3.00 8.00 7.50 $ 18.50 $ 20,000 194,500 $214,500 $ 35.00 $770,000 40%

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter5: Sales And Receivables

Section: Chapter Questions

Problem 89.1C: Ethics and Revenue Recognition Alan Spalding is CEO of a large appliance wholesaler. Alan is under...

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3-41 CVP analysis, income taxes. (CMA, adapted) J.T. Brooks and Company, a manufacturer of qual- ity handmade walnut bowls, has had a steady growth in sales for the past 5 years. However, increased competition has led Mr. Brooks, the president, to believe that an aggressive marketing campaign will be neces- sary next year to maintain the company's present growth. To prepare for next year's marketing campaign, the company's controller has prepared and presented Mr. Brooks with the following data for the current year, 2020: Variable cost (per bowl) Direct materials Direct manufacturing labor Variable overhead (manufacturing, marketing, distribution, and customer service) Total variable cost per bowl Fixed costs Manufacturing Marketing, distribution, and customer service Total fixed costs Selling price Expected sales, 22,000 units Income tax rate $ 3.00 8.00 7.50 $ 18.50 $ 20,000 194,500 $214,500 $35.00 $770,000 40% 1. What is the projected net income for 2020? 2. What is the breakeven…
What is the breakeven point in revenues for 2018 if the additional $16,500 is spent for advertising?
What is the projected net income for 2017?
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At a sales level of 25,000 units, what maximum amount can be spent on advertising if a 2018 net income of $108,450 is desired?
Marcus Tube, a manufacturer of high-quality aluminum tubing, has maintained stable sales and profits over the past 10 years. Although the market for aluminum tubing has been expanding by 3% per year, Marcus has been unsuccessful in sharing this growth. To increase its sales, the firm is considering an aggressive marketing campaign that centers on regularly running ads in all relevant trade journals and exhibiting products at all major regional and national trade shows. The campaign is expected to require an annual tax-deductible expenditure of $152,000 over the next 5 years. Sales revenue, as shown in the income statement for 2020 Marcus Tube Income Statement for the Year Ended December 31, 2020 Sales revenue $19,400,000 Less: Cost of goods sold (78%) 15,132,000 Gross profits $4,268,000 Less: Operating expenses General and administrative expense (12%) $2,328,000 Depreciation expense 490,000 Total operating expense $2,818,000 Earnings before interest and taxes $1,450,000…
Golden Fish Company is a wholesale distributor of all kinds of fish in Ramallah. The Company services grocery stores in the Ramallah District. Small but steady growth in sales has been achieved by Golden Fish over the past few years, while fish prices have been increasing. The company is formulating its plans for the coming fiscal year. Presented next are the data used to project the current year’s after-tax net income of $128,250. Average selling price per Kg $ 5.00 Average variable costs per Kg Cost of fish $ 2.50 Shipping expenses $ 0.50 Total $ 3.00 Annual fixed costs Selling…
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If the additional $16,500 is spent, what are the required 2018 revenues for 2018 net income to equal 2017 net income?
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V.L. Wu and Company, a manufacturer of quality handmade walnut bowls, has had a steady growth in sales for the past 5 years. However, increased competition has led Mr. Wu,the president, to believe that an aggressive marketing campaign will be necessary next year to maintain the company's present growth. To prepare for next year's marketing campaign, the company's controller has prepared and presented Mr. Wu with the following data for the current year, 2014: Variable cost (per bowl) Direct materials $3.00 Direct manufacturing labor 7.50 Variable overhead (manufacturing, marketing, distribution and customer service) 3.30 Total variable cost per bowl $13.80 Fixed costs Manufacturing $12,000 Marketing, distribution, and customer service 214,800 Total fixed costs $226,800 Selling price $30.00 Expected sales, 19,500 units $585,000 Income tax rate 40% Requirement 3. Mr. Wu has set the revenue target for 2015 at a level of $690,000 (or 23,000 bowls). He believes an…
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