9-25 Normal capacity utilization. The estimation of the sales for a company during the next five years isas follows:■Year 1:8,000 units■Year 2: 9,000 units■ Year 3: 10,000 units■ Year 4: 9,000 units■ Year 5: 9,000 unitsThe capacity of this company is 14,000 units per year.1. What is the normal capacity utilization of this company?2. What is the normal capacity utilization if the capacity is 8,000 units per year?

Capacity Utilization is the measure to ascertain the productivity of the entity i.e, how much…

Answered: 9-25 Normal capacity utilization. The…

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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Assume the Residential Division of Kipper Faucets had the following results last year: What is the division’s RI? a. $(140,000) b. $104,000 c. $140,000 d. $(104,000)
7. Boone Corporation's income statement for the most recent month is given below. Company Store G Store H Sales 150,000 60,000 90,000 Variable expenses 60,000 30,000 30,000 Contribution margin 90,000 30,000 60,000 Traceable fixed expenses 60,000 15,000 45,000 Division segment margin 30,000 15,000 15,000 Common fixed expenses 10,000 Net operating income $20,000 Store H sales will increase by $15,000 with no change in fixed costs. What is the new division segment margin for Store H? Group of answer choices $35,000 $25,000 $40,000 $50,000
Last year company A introduced a new product and sold 25,900 units at $97.00 per unit. The product variable expense $67.00 per unit with a fixed price expense of $835,500 per year. a. What is the product's net income or loss last year? b. What is the product break-even point in unit sales and dollar sales? c. Assume the company has conducted a market study that estimates it can increase sales by 5,000 units for each $2.00 reduction in its selling price. If the company would only consider increments of $2.00(e.g. $68,$66, etc) What is the maximum annual profit that can be earned on this product? What sales volume and selling price per unit generate the maximum profit? d. What would be the break-even point in unit sales and dollar sales using the selling price that was determined in the required letter c above? Thank you,
Question 1: Estimation of WC The management of ABC Company Limited has called for a statement showing the WC needed to finance a level of activity of 3,00,000 units of output per year. The cost statement of the company's product, for the above-mentioned activity level, is given below: Cost per unit TK 20 Direct material Direct labor Overhead Total cost Target profit Target selling price 5 TK 15 40 10 TK 50 1. Past records show that raw materials are held in stock, on an average, for two (2) months; 2. Work in process (WIP) will approximate to 15 days production; 3. Finished goods remain in warehouse on average for 1 month; 4. Suppliers for materials extend one month's credit; 5. Two months credit is normally allowed to customers (assume all sales are on credit) 6. A minimum cash balance of TK 5,00,000 is expected to be maintained; 7. The production pattern is assumed to be even during the year. Prepare a Statement of Working Capital Requirements
9-24 Capacity management. The following information is available concerning a one-product company: ■ Sales: 10,000 units a year. ■ The machine complex can operate a maximum of 8 hours a day. ■ The company can operate a maximum of 250 days a year. ■ The maximum production per day is 24 units. ■ The company is capable of processing 2,000 kg of raw material a year. One kg of raw material yields two finished products. ■ One worker produces one product per hour. A maximum of six workers can be employed. The working time per day is 8 hours. The normal capacity utilization is 100% of maximum capacity. 1. Which production factor is a bottleneck? What is the normal capacity utilization for this company? 2. Calculate the cost per product.
ch7-50 Jellico Inc.'s projected operating income (based on sales of 450,000 units) for the coming year is as follows: Total Sales $ 12,150,000 Total variable cost 7,533,000 Contribution margin $ 4,617,000 Total fixed cost 2,875,878 Operating income $ 1,741,122 Required: 1(a). Compute variable cost per unit. Enter your answer to the nearest cent.$per unit 1(b). Compute contribution margin per unit. Enter your answer to the nearest cent.$per unit 1(c). Compute contribution margin ratio. % 1(d). Compute break-even point in units. units 1(e). Compute break-even point in sales dollars.$ 2. How many units must be sold to earn operating income of $376,542? units 3. Compute the additional operating income that Jellico would earn if sales were $50,000 more than expected.$ 4. For the projected level of sales, compute the margin of safety in units, and then in sales dollars. Margin of safety in units units Margin of safety in sales dollars $ 5. Compute the degree…
H1.
Question 8 of 17 A business has the capacity to manufacture 720 electronic components per annum that it sells for $500 each. The variable costs are $270 per component and the fixed costs are $102,000 per year. a. What quantity should it sell in a year to have a net income of $41,000 per year? Round up to the next whole number b. What is the net income per year at capacity? SAVE PROGRESS SUBMIT AS
A firm operated at 90% of capacity for the past year, during which fixed costs were $420,000, variable costs were 40% of sales, and sales were $1,000,000. Operating profit was: Answer a. $980,000 b. $420,000 c. $1,080,000 d. $180,000
Q1. A company has direct production costs equal to 57.74 percent of total annual sales, and fixed charges, overhead, and general expenses equal to 0.29. If management proposes to increase present annual sales of 4.5 million by 29.4 percent with a 15.33 percent increase in fixed charges, overhead, and general expenses. Estimate a) Annual sales amount that is required to provide the same gross earnings as the present plant operation? b) Net profit if the expanded plant were operated at full capacity with an income tax on gross earnings of 35 percent? c) Net profit for the enlarged plant if total annual sales remained at 4.5 million? d) Net profit for the enlarged plant if the total annual sales actually decreased by 100,000?

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