a) Ceria Company plans to sell 5,000 bicycle helmets at RM75 each in the coming year. Unit variable cost is RM45 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals RM49,500 (includes fixed factory overhead and fixed selling and administrative expense). Required: Calculate the break-even number of helmets. Check your answer by preparing a contribution margin income statement based on the break-even units.

a) Ceria Company plans to sell 5,000 bicycle helmets at RM75 each in the coming year. Unit variable cost is RM45 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals RM49,500 (includes fixed factory overhead and fixed selling and administrative expense). Required: Calculate the break-even number of helmets. Check your answer by preparing a contribution margin income statement based on the break-even units.

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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Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of $22 each in the coming year. Total variable costs equal $1,086,800. Total fixed costs equal $8,000,000. (Round all ratios to four significant digits, and round all dollar amounts to the nearest dollar.)Required:1. What is the contribution margin per unit? What is the contribution margin ratio?2. Calculate the sales revenue needed to break even.3. Calculate the sales revenue needed to achieve a target profit of $245,000.4. What if the average price per unit increased to $23.50? Recalculate:a. Contribution margin per unitb. Contribution margin ratio (rounded to four decimal places)c. Sales revenue needed to break evend. Sales revenue needed to achieve a target profit of $245,000
6. Atlantic Manufacturing produces and sells children’s bikes at an average price of $80. Its costs are as follows: direct materials = $14; direct labour = $8; variable overhead = $3; sales commission is 10% of price. Its fixed monthly costs are $42,000. Required: 1. Using the above cost data, set up a monthly cost equation. 2. What is the company’s contribution margin percentage? (Round your answer to 2 decimal places.)
= Adam's Repair Shop has a monthly target operating income of $12,500. Variable expenses are 75% of sales, and monthly fixed expenses are $9,500. Hint: The contribution margin ratio= 100% - Variable expenses percentage of sales. Read the requirements. Requirement 1. Compute the monthly margin of safety in dollars if the shop achieves its income goal. Begin by identifying the formula to compute the margin of safety. = Margin of safety in dollars (Round intermediate calculations up to the nearest whole dollar and your final answer to the nearest whole dollar.) The margin of safety is Requirement 2. Express Adam's margin of safety as a percentage of target sales. Begin by identifying the formula to compute the margin of safety as a percentage of target sales. (Round the percentage to the nearest whole percent.) The margin of safety percentage is % of target sales. Requirement 3. What is Adam's operating leverage factor at the target level of operating income? Begin by identifying the…
5. (A) Explain in detail the meaning of Contribution Margin. (B) Robeson Company expects to produce and sell 500 units next month. Data on costs foll Per unit costs: Selling price Variable manufacturing costs Variable selling costs $8.00 $2.75 $0.25 Total costs: Fixed manufacturing costs Fixed selling costs REQUIRED: $1,000 $ 125 What is the breakeven point in units? What is the breakeven point in sales dollars? What is the expected operating income for next month? What is the margin of safety in dollars? i. ii. iii. iv.
A manufacturer is considering whether to make or buy a component used in its production. The annual cost of producing the 10,000 parts is as follows. Direct variable manufacturing costs $ 300,000Direct fixed manufacturing costs $ 100,000Allocated overhead $ 50,000 If the manufacture buys the component, the direct fixed manufacturing costs can be reduced by 73 per cent. What is the maximum unit purchasing price that makes purchasing a beneficial decision in comparison to making?
Develop an equation for total monthly production costs. Total Monthly Production costs = Fixed Costs + Variable Costs = _____________ + ($ per unit X Number of units) Predict total costs for a monthly production volume of 9,000 units.
A company manufactures and sells one product. It plans to sell 25,000 units for the period. The selling price per unit is $10 and its variable cost per unit is $4.80. The total fixed costs for the period is $104,000. Calculate the contribution margin per unit. Calculate the contribution margin ratio. Calculate the break-even quantity (units Calculate the break-even total revenues
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Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Incorporated, has been experiencing financial difficulty for some time. The company's contribution formaet Income statement for the most recent month is given below Sales (12,600 units $30 per unit) Variable expenses Contribution margin Fixed expenses $ 378,000 226,800 151,280 160,200 Net operating loss $ (18,000) Required: 1. Compute the company's CM ratio and its break-even point in unit sales and dollar sales. 2. The president believes that a $6,600 Increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will increase unit sales and the total sales by $82,000 per month. If the president is right, what will be the Increase (decrease) in the company's monthly net operating Income? 3. Refer to the original dets. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of $39,000 in the monthly advertising…
You need 1,000 units of product Y per month. You currently make product Y in-house at a cost of $7/unit, which consists of $2/unit of fixed costs and $5/unit of variable costs. An outside supplier has offered to manufacture product Y for you at a wholesale price of $2 per unit. If you outsource the production of Y to the outside supplier in the short term, your profit will: increase by $3,000 decrease by $2,000 remain the same decrease by $3,000 increase by $2,000
Your company manufactures bikes that sell for $10,000. Unit variable costs are $6,000 and totalmonthly fixed costs are $500,000. What is the number of units that must be producedand sold to earn a target income amount of $2,400,000?