Answer the following questions using the information below:Kramer Enterprises reports year-end information from 20X8 as follows:$960,000Sales (160,000 units)Variable Costs640,000Contribution Margin320,000Fixed Costs260,000Operating Income$60,00013Kramer is developing the 20X9 budget. In 20X9 the company would like to increase sellingprices by 12.5%, and as a result expects a decrease in sales volume of 9%.What is budgeted variable costs for 20X9?$720,000O $582,400O $691,200$640,000

$582,400Budgeted variable cost= $582,40020X8selling price per units= $960,000/160,000=$6variable…

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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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Photo Finish, Incorporated produces and sells picture frames. Variable costs are expected to be $17 per frame; fixed costs for the year are expected to total $130,000. The budgeted selling price is $25 per frame. The sales units required by Photo Finish to make a before-tax profit (πB) of $15,000 would be: Multiple Choice 16,850 units. 11,625 units. 20,675 units. 28,350 units. 18,125 units.
In the current year, Becker Sofa Company expected to sell 12,000 leather sofas. Fixed costs for the year were expected to be $8,400,000; unit sales price was budgeted at $4,600; and unit variable costs were expected to be $2,200.Becker Sofa Company's margin of safety (MOS) in sales dollars is:
Marketing Docs prepares marketing plans for growing businesses. For 2017, budgeted revenues are $1,500,000 based on 500 marketing plans at an average rate per plan of $3,000. The company would like to achieve a margin of safety percentage of at least 45%. The company’s current fixed costs are $400,000 and variable costs average $2,000 per marketing plan. q. Calculate Marketing Docs’ breakeven point and margin of safety in units.
The fixed costs of Shanita, nv are $471,000 and the total variable costs for its only product are 30% of the sales price, which is $200. Shanita currently sells 5,400 units per month and is looking to sell more. Consider each of the following independently: Part A A new marketing campaign is being contemplated that would cost $4,000 per month and have the expected effect of increasing sales per month by 260 units. If this campaign is undertaken, what is the expected effect on monthly income? Part B Management is considering adding a new feature to its product that will cause an increase in variable costs of $7 per unit. It is expected that sales will increase by 310 units per month if this feature is added. If the feature is added, what should be the overall effect on the company's monthly income? Part C The marketing manager is considering lowering base salaries of salespeople by a collective amount of $41,000 per month while increasing the sales commission by $6 per unit. He believes…
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More-Power Company has projected sales of 75,000 regular sanders and 30,000 mini-sanders for next year. The projected income statement is as follows: Regular Sander Mini-Sander Total Sales $3,000,000 $1,800,000 $4,800,000 Less: Variable expenses 1,800,000 900,000 2,700,000 Contribution margin $1,200,000 $900,000 $2,100,000 Less: Direct fixed expenses 250,000 450,000 700,000 Product margin $950,000 $450,000 $1,400,000 Less: Common fixed expenses 600,000 Operating income $800,000 Required: 1. For each of the following possible sales mixes, calculate operating income: Regular Sander Mini-Sander a. 75,000 37,500 b. 60,000 60,000 c. 30,000 90,000 d. 30,000 60,000 Operating Income a. $_________ b. $______ c. $________ d. $_________ 2. Calculate the break-even units for each product for each of the preceding sales mixes. Round the number of break-even packages to two decimal…
During the current year, OutlyTech Corp. expected to sell 22,500 telephone switches. Fixed costs for the year were expected to be $12,142,500, the unit sales price was budgeted at $3,250, and unit variable costs were budgeted at $1,400. OutlyTech's margin of safety (MOS) in units is (rounded up to nearest whole number): Multiple Choice 17,106. 15,936. 19,716. 15,806. 21,026.
As a newly hired management accountant, you have been asked to prepare a profit plan for the company for which you work. As part of this task, you've been asked to do some what-if analyses. Following is the budgeted Information regarding the coming year: Selling price per unit Variable cost per unit Fixed costs (per year) Required: $ 100.00 60.00 1,113,040 1. What is the breakeven volume, in units and dollars, for the coming year? 2. Assume that the goal of the company is to earn a pretax (operating) profit of $316,000 for the coming year. How many units would the company have to sell to achieve this goal? 3. Assume that of the $60 variable cost per unit the labor-cost component is $27. Current negotiations with the employees of the company indicate some uncertainty regarding the labor cost component of the variable cost figure presented above. What is the effect on the breakeven point in units if selling price and fixed costs are as planned, but the labor cost for the coming year is…
During the current year, OutlyTech Corp. expected to sell 84 000 telephone switches. Fixed costs for the year were expected to be R16 080 000, the unit sales price was budgeted at R900, and unit variable costs were budgeted at R600. OutlyTech's margin of safety (MOS) in sales Rands is: A. R59 520 000 B. R25 200 000 C. R91 680 000 D. R27 360 000
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Dd.6.
The firm uses the absorption costing approach to cost-plus pricing described in the text to set prices for its products. Based on budgeted sales of 45,000 units next year, the unit product cost of a particular product is ₱15.60. The company's selling, general, and administrative expenses for this product are budgeted to be ₱1,035,000 in total for the year. The company has invested ₱280,000 in this product and expects a return on investment of 11%. The selling price for this product based on the absorption costing approach described would be closest to: a. ₱39.28 b. ₱17.32 c. ₱97.20 d. ₱38.60

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