Angela Company is concerned about its operating performance, as summarized below:Revenues (P12.50 per unit)Variable costsOperating lossP300,000180,000(40,000)How many additional units should be sold in order for Angela Company to break-even?16,0008,00032,00024,000

Break even is point at which an entity is in situation of no profit no loss. It is the point whereby…

Answered: Angela Company is concerned about its…

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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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
a. If Canace Company, with a break-even point at $426,400 of sales, has actual sales of $520,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number. 1. $ 2. % p. If the margin of safety for Canace Company was 25%, fixed costs were $1,494,375, and variable costs were 75% of sales, what was the amount of actual sales dollars)? Hint: Determine the break-even in sales dollars first.)
The Biscuits Crunch Company had the following information available regarding last year's operations: Sales (100,000 units) Variable costs Contribution margin Fixed costs Net Income $200,000 100,000 100,000 50,000 50,000 If sales were to increase by 200 units, what would be the effect on net income? A) 400 increase B) 200 increase C) 100 increase D) 200 loss E) 150 increase
Jake Company has three product lines, one of which has the following results: Sales P215,000 Variable expenses 125,000 Contribution margin 90,000 Fixed expenses 130,000 Net loss P (40,000) If this product line is eliminated, 60% of the fixed expenses will be eliminated and the other 40% will be allocated to other product lines. If management decides to eliminate this product line, how much will the company's net income or loss be?
e. 5,000 XYZ company is studying the profitability of a change in operation and has gathered the following information. Current Operation: Fixed Costs: $38,000, Selling Price: $16, Variable Cost: $10, and Sales (Units): 9,000. Anticipated Operation: Fixed Costs: $48,000, Selling Price: $22, Variable Cost: $12, and Sales (Units): 6,000. Should XYZ company make the change? Select one: O a. No, because sales will drop by 3,000 units. Ob. It is impossible to judge because additional information is needed. Oc. No, because the company will be worse off by $4,000. O d. Yes, the company will be better off by $6,000. Oe. No, because the company will be worse off by $22000. Next page
Bha
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
a. If Canace Company, with a break-even point at $368,000 of sales, has actual sales of $460,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number. 1. $fill in the blank 1 2. fill in the blank 2% b. If the margin of safety for Canace Company was 45%, fixed costs were $1,935,450, and variable costs were 55% of sales, what was the amount of actual sales (dollars)?(Hint: Determine the break-even in sales dollars first.)$fill in the blank 3
A company has three product lines, one of which reflects the following results: Sales Variable expenses Contribution margin Fixed expenses Net loss O decrease by $4000. O increase by $4000 decrease by $82000 $181000 99000 O increase by $48000 82000 130000 If this product line is eliminated, 60% of the fixed expenses can be eliminated and the other 40% will be allocated to other product lines. If management decides to eliminate this product line, the company's net income will $ (48000)
Pepper’s Automotive (see Brief Exercise 18-19) has further analyzed the exhaust systemdivision into three products: exhaust pipes, intake valves, and intake pipes. The incomestatement is available below.If intake valves were dropped, what would be the change in profits in the short run and thelong run, respectively?[LO 18-4]Exhaust Pipes Intake Valves Intake PipesNet revenues $500,000 $300,000 $200,000Variable costs 50,000 150,000 100,000Contribution margin 450,000 150,000 100,000Controllable fixed costs 50,000 50,000 0Controllable margin 400,000 100,000 100,000Noncontrollable fixed costs 100,000 150,000 50,000Contribution by profit center $300,000 $ (50,000) $ 50,000a. Short run: $100,000 decrease; long run: $50,000 increaseb. Short run: $150,000 increase; long run: $50,000 decreasec. Short run: $100,000 increase; long run: $50,000 decreased. Short run: $50,000 increase; long run: $100,000 decrease

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Angela Company is concerned about its operating performance, as summarized below: Revenues (P12.50 per unit) Variable costs Operating loss P300,000 180,000 (40,000) How many additional units should be sold in order for Angela Company to break-even? 16,000 8,000 32,000 24,000