BlueSky Enterprises has variable costs equal to 30% of sales. The company is considering a proposal that will increase sales by $15,000 and total fixed costs by $5,000. By what amount will net income increase?

BlueSky Enterprises has variable costs equal to 30% of sales. The company is considering a proposal that will increase sales by $15,000 and total fixed costs by $5,000. By what amount will net income increase?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 10E: Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22...

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BlueSky Enterprises has variable costs equal to 30% of
sales. The company is considering a proposal that will
increase sales by $15,000 and total fixed costs by $5,000.
By what amount will net income increase?

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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 unit b. Contribution margin ratio (rounded to four decimal places) c. Sales revenue needed to break even d. Sales revenue needed to achieve a target profit of 245,000
Delta Co. sells a product for $150 per unit. The variable cost per unit is $90 and fixed costs are $15,250. Delta Co.s tax rate is 36% and the company wants to earn $44,000 after taxes. What would be Deltas desired pre-tax income? What would be break-even point in units to reach the income goal of $44,000 after taxes? What would be break-even point in sales dollars to reach the income goal of $44000 after taxes? Create a contribution margin income statement to show that the break-even point calculated in B, generates the desired after-tax income.
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What amount will net income increase?
What amount will net income increase?
what are the required sales?
What amount of net income?
Taylor Corp. has fixed costs of $800,000. Variable costs are 30% of sales, and the company wants a net income of $200,000. What are the required sales?
Flare Enterprises sells a product in a competitive marketplace. Market analysis indicates that its product would probably sell at $60 per unit. Flare management desires a 15% profit margin on sales. Their current full cost for the product is $52 per unit. In order to meet the new target cost, how much will the company have to cut costs per unit, if any?
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Ans
Greenwood Enterprises has a contribution margin ratio of 30%. The company is considering a proposal that will increase sales by $200,000. What increase in profit can be expected if total fixed costs increase by $40,000?