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3. Suppose that Aubrey Company is considering an investment in new technology that will increase fixed costs by $231,400 per year, but will lower variable costs to 50 p Prepare a budgeted income statement assuming the company makes this investment. Round all amounts to the nearest dollar. Aubrey Company Budgeted Income Statement Sales ✔ Less: Variable costs Contribution margin Less: Fixed costs Operating income Feedback Check My Work Recalculate using new information. 1.396.100

3. Suppose that Aubrey Company is considering an investment in new technology that will increase fixed costs by $231,400 per year, but will lower variable costs to 50 p Prepare a budgeted income statement assuming the company makes this investment. Round all amounts to the nearest dollar. Aubrey Company Budgeted Income Statement Sales ✔ Less: Variable costs Contribution margin Less: Fixed costs Operating income Feedback Check My Work Recalculate using new information. 1.396.100

FINANCIAL ACCOUNTING
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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3. Suppose that Aubrey Company is considering an investment in new technology that will increase fixed costs by $231,400 per year, but will lower variable costs to 50 percent of sales. Units sold will remain unchanged. Prepare a budgeted income statement assuming the company makes this investment. Round all amounts to the nearest dollar. Aubrey Company Budgeted Income Statement ✓ Sales Less: Variable costs Contribution margin Less: Fixed costs Operating income Feedback ✓ Check My Work Recalculate using new information. Feedback 1.396,100 What is the new break-even point in units, assuming the investment is made? In your computations, round the unit contribution margin to the nearest cent. Round your final answer to the nearest whole unit. units
Transcribed Image Text:3. Suppose that Aubrey Company is considering an investment in new technology that will increase fixed costs by $231,400 per year, but will lower variable costs to 50 percent of sales. Units sold will remain unchanged. Prepare a budgeted income statement assuming the company makes this investment. Round all amounts to the nearest dollar. Aubrey Company Budgeted Income Statement ✓ Sales Less: Variable costs Contribution margin Less: Fixed costs Operating income Feedback ✓ Check My Work Recalculate using new information. Feedback 1.396,100 What is the new break-even point in units, assuming the investment is made? In your computations, round the unit contribution margin to the nearest cent. Round your final answer to the nearest whole unit. units
Break-Even in Units and Sales Dollars, Margin of Safety Aubrey Company produces a single product. Last year's income statement is as follows: Sales (23,000 units) Less: Variable costs Contribution margin Less: Fixed costs Operating income Required: $1,396,100 943,000 $453,100 260,900 $192,200 1. Compute the break-even point in units and sales revenue. In your computations, round the contribution margin per unit to the nearest cent and round the contribution margin ratio to four decimal places. Round your final answers to the nearest whole unit or dollar. Break-even units 13,244 units ✓ 803,889 X Break-even dollars 2. What was the margin of safety in dollars for the Company last year? Round your final answer to the nearest whole dollar. Feedback
Transcribed Image Text:Break-Even in Units and Sales Dollars, Margin of Safety Aubrey Company produces a single product. Last year's income statement is as follows: Sales (23,000 units) Less: Variable costs Contribution margin Less: Fixed costs Operating income Required: $1,396,100 943,000 $453,100 260,900 $192,200 1. Compute the break-even point in units and sales revenue. In your computations, round the contribution margin per unit to the nearest cent and round the contribution margin ratio to four decimal places. Round your final answers to the nearest whole unit or dollar. Break-even units 13,244 units ✓ 803,889 X Break-even dollars 2. What was the margin of safety in dollars for the Company last year? Round your final answer to the nearest whole dollar. Feedback
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