A company makes a single product that it sells for $16 per unit. Fixed costs are $76,800 per month and the product has a contribution margin ratio of40%. If the company's actual sales are $224,000, its margin of safety is:Multiple ChoiceOO$32,000$192,000$128,000$96,000

Margin of Safety = Current Sales - Break Even Sales and Break Even sales = Fixed Cost /…

Answered: A company makes a single product that…

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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Data concerning Wislocki Corporation's single product appear below: Selling price Variable expenses Contribution margin Per Unit Percent of Sales $ 150 36 100% 24% $ 114 76% Fixed expenses are $1,042,000 per month. The company is currently selling 9,700 units per month. Required: The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $12 per unit. In exchange, the sales staff would accept an overall decrease in their salaries of $104,000 per month. The marketing manager predicts that introducing this sales incentive would increase monthly sales by 330 units. What should be the overall effect on the company's monthly net operating income of this change? Change in net operating income
Chovanec Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Selling price $ 170 100% Variable expenses 68 40% Contribution margin $ 102 60% Fixed expenses are $521,000 per month. The company is currently selling 7,000 units per month. Management is considering using a new component that would increase the unit variable cost by $6. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 500 units. What should be the overall effect on the company's monthly net operating income of this change? Multiple Choice increase of $6,000 decrease of $6,000 decrease of $48,000 increase of $48,000
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5a
ok ces O'Reilly Incorporated makes and sells many consumer products. The firm's average contribution margin ratio is 22%. Management is considering adding a new product that will require an additional $10,500 per month of fixed expenses and will have variable expenses of $6.5 per unit. Required: a. Calculate the selling price that will be required for the new product if it is to have a contribution margin ratio equal to 22%. Note: Round your answer to 2 decimal places. b. Calculate the number of units of the new product that would have to be sold if the new product is to increase the firm's monthly operating income by $8,500. Note: Do not round intermediate calculations. a. Selling price b. Number of units per unit
Ferkil Corporation manufacturers a single product that has a selling price of $20.00 per unit. Fixed expenses total $63,000 per year, and the company must sell 9,000 units to break even. If the company has a target profit of $17,500, sales in units must be: Multiple Choice O 9,875 units (O 11,500 units 12,150 units 10,682 units
If a company has fixed costs of $6.000 per month and their product that sells for $200 has a contribution margin ratio of 30%, how many units must they sell in order to break even? А. 100 В. 180 С. 200 D. 2,000
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A company makes a single product that it sells for $16 per unit. Fixed costs are $76,800 per month and the product has a contribution margin ratio of 40%. If the company's actual sales are $224,000, its margin of safety is: Multiple Choice $32,000 $192,000 $128,000 $96,000