7. Answer the following questions, considering each situation independently. You might not be able to answer the questions in the order they are asked.1. A company earned $200,000 selling 100,000 units at $8 per unit. Its fixed costs are $400,000.A. What are variable cost per unit?B. What is total contribution margin?C. What would income be if sales

7. Answer the following questions, considering each situation independently. You might not be able to answer the questions in the order they are asked.1. A company earned $200,000 selling 100,000 units at $8 per unit. Its fixed costs are $400,000.A. What are variable cost per unit?B. What is total contribution margin?C. What would income be if sales

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Description: 7. Answer the followingquestions, considering eachsituation independently. Youmight not be able to answer thequestions in the order they areasked.1. A company earned$200,000 selling 100,000 unitsat $8 per unit. Its fixed costs are$400,000.A. What ar

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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Which of the following statements is true? I. Incremental analysis is an analytical approach that focuses only on those revenues and costs that will not change as a result of a decision. II. When expressed on a per unit basis, fixed costs can mislead decision makers into thinking of them as variable costs. II. To estimate what the profit will be at various levels of sales volume, multiply the number of units to be sold above or below the break-even point by the unit contribution margin. Statements I and III are true. Statements II and III are true. All of the statements are true. None of the statements are true.
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the following costs and expenses for the month: $ 74,000 $ 37,500 Direct materials Direct labor $ 17,000 29,500 Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing overhead Variable selling expense Fixed selling expense Total selling expense Variable administrative expense Fixed administrative expense Total administrative expense $ 46,500 $ 13,000 20,000 $ 33,000 $ 4,500 26,000 $ 30,500
1. To compute the breakeven point using the contribution margin, we get the ratio of a. Total fixed expenses and Total contribution margin b. Total variable expenses and Total Contribution margin c. Total fixed expenses and Contribution margin per unit d. Total variable expenses and Contribution margin per unit 2. A mathematical expression that describes a breakeven point of a company is a. Sales Revenue = Variable expenses + Fixed expenses b. Sales Revenue = Variable expenses - Fixed expenses c. Sales Revenue < Variable expenses + Fixed expenses d. Sales Revenue > Variable expenses - Fixed expenses 3. The Cost-Volume-Profit equation is given by a. Sales Revenue = Profits + Contribution margin ratio + Fixed expenses b. Sales Revenue = Profits + Contribution margin + Fixed expenses c. Sales Revenue = Profits+ Variable expenses + Fixed expenses d. Sales Revenue = Profits -Variable expenses…
CVP Analysis using a chart: The cost-volume-profit chart for Byron Manufacturing is shown. Use the graph to complete the sentences given below. SALES AND COSTS (Dollars) 20000 Sales 15000 Total Costs 10000 5000 100 200 300 400 500 600 700 800 900 1000 UNITS OF SALES Byron Manufacturing reaches its break-even level of activity when it sells 500 -v units and generates $12,000 v in revenue, because at this level of activity the firm's revenue equals -v its total cost. In addition, you can determine from the chart that Byron Manufacturing's fixed costs are $6,000 -v and its price per unit is $24.00 V and variable cost per unit is $12.00 If fixed costs increase, what will happen to the break-even point? The break-even point will increase. If the price per unit decreases, what will happen to the break-even point? The break-even point will increase.
For questions 5-6, please classify the costs of each of the following as variable, fixed, mixed, or step. Sales volume is the cost driver. 5. Real estate taxes A) Variable В) Fixed C) Mixed D) Step Your answer is Explain your answer: 6. Electric power in a factory A) Variable B) Fixed с) Mixed D) Step Your answer is Explain your answer:
1. Fill in the missing numbers in the table. Use the following questions to help fill in the missing numbers in the table: a. What is the total contribution margin? b. What is the total variable expense? c. How many units were sold? d. What is the per-unit variable expense? e. What is the per-unit contribution margin? 2. Answer the following questions about breakeven analysis: a. What is the breakeven point in units? b. What is the breakeven point in sales dollars? 3. Answer the following questions about target profit analysis and safety margin: a. How many units must the company sell in order to earn a profit of $48,000? b. What is the current margin of safety in units? c. What is the margin of safety in sales dollars? d. What is the margin of safety in percentage?
Suppose a company has fixed costs of $47,600 and variable cost per unit of ². +222 dollars, where x is the total number of dollars per unit. units produced. Suppose further that the selling price of its product is 1656- (a) Find the break-even points. (Enter your answers as a comma-separated list.) x= (b) Find the maximum revenue. (Round your answer to the nearest cent.) $ (c) Form the profit function P(x) from the cost and revenue functions. P(x) Find maximum profit. (d) What price will maximize the profit? (Round your answer to the nearest cent.)
Fill in the missing amounts in each of the eight case situations below. Each case Is Independent of the others. (Hint: One way to find the missing amounts would be to prepare a contribution format Income statement for each case, enter the known data, and then compute the missing items.) Required: a. Assume that only one product is being sold in each of the following four case situations: Unit sold Sales Variable expenses Fixed expenses Operating income (loss) Contribution margin per unit Sales Variable expenses Fixed expenses $ Operating income (loss) Average contribution margin (percentage) Case #1 20,400 244,800 163,200 68,000 $ $ 136,000 $ 10 Case #2 $ Case #1 536,000 43,520 10.880 $ 8,800 20% 10 $ 69 Case #3 Case #2 13,600 b. Assume that more than one product is being sold in each of the following four case situations: (Enter "Contribution margin ratio" in percent. Round your final answers to the nearest whole dollar amount.) 436.000 283.400 109.000 95,200 16,320 13 $ S CA Case #4…
If an organization wants to make a profit, it must generate more sales revenue than the total costs it incurs. This relation can be expressed using which of the following profit equations? O a. Operating income = [(Sales price per unit - Variable cost per unit) x #units sold] - Fixed cost O b. Operating income = [Sales price per unit - Fixed cost per unit) x # units produced] -Variable cost Oc Operating income Sales revenue - Total variable costs - Discretionary costs O d. Operating income - Sales revenue - Committed costs - Fixed costs
Management believes it can sell a new product for $7.50. The fixed costs of production are estimated to be $4,500, and the variable costs are $3.90 a unit. a. Complete the following table at the given levels of output and the relationships between quantity and fixed costs, quantity and variable costs, and quantity and total costs. Round your answers to the nearest dollar Enter zero if necessary. Use a minus sign to enter losses, if any Quantity Variable Costs Fixed Costs 0 500 1,000 $ $ $ S 2,500 $ 3,000 S 1,500 2,000 Total Revenue S Quantity $ $ Total Revenue $ $ $ $ $ $ $ $ $ S Fixed Costs $ $ Total Costs b. Determine the break-even level using the above table and use the Exhibit 19.5 to confirm the break even level of output. Round your answers for the break-even level to the nearest whole number. Round your answers for the fixed costs, variable costs, total costs, and profits (losses) to the nearest dollar. Enter zero if necessary Use a minus sign to enter losses, if any Variable…
• Use the below information to fill out the income statement and answer the questions 4-10 below: Selling Price per Unit Number of Units Total Dollars Sales Revenue $40.00 Variable Costs |600,000 Contribution Margin Fixed Costs 240,000 Net Income If OPEARATING LEVERAGE is 5 4. What is Net Income ?
Each of a company's two product lines has a different contribution margin ratio . If the company's total sales remain the same but the sales mix shifts toward selling more of the product with the higher contribution ratio , which of the following is true ? O a Fixed cost will be constant . . the breakeven point will decrease . Ocall of the answers are true . d the average contribution margin ratio will increase . O e operating income will increase