3. A. Using the following Income Statement, determine the number of sno-cones that Lulu's Sno-Cone Stand must sell to break even. Sales - COGS = Gross Margin SG&A = Operating Income Depreciation = Net Income $500 $200 $300 $150 $150 $50 $100 (200 sno-cones @ $2.50) B. Lulu want to reduce her breakeven point. Which has the greater effect on her breakeven - a 10% reduction in SG&A or a 10% reduction in COGS? Show why.
3. A. Using the following Income Statement, determine the number of sno-cones that Lulu's Sno-Cone Stand must sell to break even. Sales - COGS = Gross Margin SG&A = Operating Income Depreciation = Net Income $500 $200 $300 $150 $150 $50 $100 (200 sno-cones @ $2.50) B. Lulu want to reduce her breakeven point. Which has the greater effect on her breakeven - a 10% reduction in SG&A or a 10% reduction in COGS? Show why.
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter18: Cost-volume-profit Analysis (cvp)
Section: Chapter Questions
Problem 3R: Based on Poleskis current situation, will it earn its target net income? If not, how many units need...
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Question
![3. A. Using the following Income Statement, determine the number of sno-cones that Lulu's
Sno-Cone Stand must sell to break even.
Sales
- COGS
=
- Gross Margin
- SG&A
= Operating Income
- Depreciation
=
- Net Income
$500
$200
$300
$150
$150
$50
$100
(200 sno-cones @ $2.50)
B. Lulu want to reduce her breakeven point. Which has the greater effect on her breakeven -
a 10% reduction in SG&A or a 10% reduction in COGS? Show why.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcebd4779-0d77-4934-b7cd-970817cc004d%2Fb53e847e-9e05-49a0-bd93-6d71fbfb920a%2Fkqtveb9_processed.png&w=3840&q=75)
Transcribed Image Text:3. A. Using the following Income Statement, determine the number of sno-cones that Lulu's
Sno-Cone Stand must sell to break even.
Sales
- COGS
=
- Gross Margin
- SG&A
= Operating Income
- Depreciation
=
- Net Income
$500
$200
$300
$150
$150
$50
$100
(200 sno-cones @ $2.50)
B. Lulu want to reduce her breakeven point. Which has the greater effect on her breakeven -
a 10% reduction in SG&A or a 10% reduction in COGS? Show why.
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