Adam, Inc., sells a single product. The company's most recent income statement is given below. Sales Less variable expenses Contribution margin Less fixed expenses $200,000 (120,000) 80,000 (50,000) $ 30.000 Net income Required: Contribution margin ratio is b. a. % Breakeven point in total sales dollars is To achieve $40,000 in net income, sales must total $ C. d. If sales increase by $50,000, net income will increase by $

Adam, Inc., sells a single product. The company's most recent income statement is given below. Sales Less variable expenses Contribution margin Less fixed expenses $200,000 (120,000) 80,000 (50,000) $ 30.000 Net income Required: Contribution margin ratio is b. a. % Breakeven point in total sales dollars is To achieve $40,000 in net income, sales must total $ C. d. If sales increase by $50,000, net income will increase by $

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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Schister Systems uses the following data in its Cost-Volume-Profit analyses: Total Sales $ 325,000 Variable expenses 195,000 Contribution margin 130,000 Fixed expenses 105,000 Net operating income $ 25,000 What is total contribution margin if sales volume increases by 30%? Multiple Choice $17,500 $130,000 $32,500 $169,000
Diamond, Inc.'s most recent contribution margin income statement shows the following: Sales @ $10 per unit Less: Variable expenses Contribution margin Less: Fixed expenses Operating income (loss) $160,000 (120,000) $ 40,000 (50,000) $ (10,000) If Diamond, Inc's advertising costs increased by $5,000, by how much would sales have to increase for the company to achieve an operating income of $4,000? a. $56,000 Ob. $42,000 c. $76,000 Od. $18,000
Schister Systems uses the following data in its Cost-Volume-Profit analyses: Total Sales $380,000 Variable expenses $228,000 Contribution margin $152,000 Fixed expenses $116,000 Net operating income $36,000 What is total contribution margin if sales volume increases by 20%?
1. Shown below is an income statement in the traditional format for Ellie Inc, which has a contribution margin ratio of 25%. Sales ...... Cost of goods sold... Gross profit...... Operating expenses: Selling... Administrative.... Operating income $100,000 (70,000) $ 30,000 (5,000) (10,000) $ 15,000 Prepare an income statement in the contribution margin format. b. Calculate the sales per unit, variable expense per unit, and contribution margin per unit if 10,000 units were produced and sold. c. Calculate the cost formula (Y=a+bX). d. Calculate the firm's break even point in units.
Diamond, Inc.'s most recent contribution margin income statement shows the following: Sales @ $10 per unit Less: Variable expenses Contribution margin Less: Fixed expenses Operating income (loss) $160,000 (120,000) $ 40,000 (50,000) $ (10,000) If Diamond, Inc's advertising costs increased by $5,000, by how much would sales have to increase for the company to achieve an operating income of $4,000? a. $56,000 b. $42,000 c. $76,000 Od. $18,000
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Miller Company's most recent income statement follows: Sales (18,9e0 units) Less: Variable expenses Total $504, 000 126, 000 Per Unit $ 28 Contribution margin 378,000 $ 21 Less: Fixed expenses 53,00 $325, 000 Net income Consider each of the following cases independently. Required: 1. Prepare a new income statement if the sales volume increases by 30%, and the selling price decreases by $4.00. (Do not round Intermedlate calculations. Round "Per Unlt" answers to 2 decimel places.) Total Per Unit Sales