Carbex, Inc., produces cutlery sets out of high-quality wood and steel. The company makes a Standard set and a Deluxe set and sells them to retail department stores throughout the country. The Standard set sells for $100, and the Deluxe set sells for $115. The variable expenses associated with each set are given below. Variable production costs Sales commissions (35% of sales price) The company's fixed expenses each month are: Advertising Depreciation Administrative April May Mary Parsons, the financial vice president, watches sales commissions carefully and has noted that they have risen steadily over the last year. For this reason, she was shocked to find that even though sales have increased, profits for the current month-May-are down substantially from April. Sales, in sets, for the last two months are given below: Req 1A Total Standard Deluxe 6,000 4,000 10,000 3,000 7,000 10,000 Required: 1-a. Prepare contribution format income statements for April. 1-b. Prepare contribution format income statements for May. 3-a. Compute the break-even point in dollar sales for April. 3-b. Would the break-even point in May be higher or lower than the break-even point in April? $ 125,000 $ 27,700 $ 73,000 Complete this question by entering your answers in the tabs below. Variable expenses: Req 1B Fixed expenses: Total variable expenses Total fixed expenses Standard $ 35.00 $ 35.00 Req 3A Prepare contribution format income statements for April. (Round your "Percentage" answers to 1 decimal place (i.e. .1234 should be entered as 12.3).) Req 3B Amount Carbex, Inc. Income Statement For April Standard % Deluxe $ 50.00 $ 40.25 % % % % % % % < Req 1A Deluxe Amount % % % % % % % % Amount Req 1B > Total % % % % % % % %
Carbex, Inc., produces cutlery sets out of high-quality wood and steel. The company makes a Standard set and a Deluxe set and sells them to retail department stores throughout the country. The Standard set sells for $100, and the Deluxe set sells for $115. The variable expenses associated with each set are given below. Variable production costs Sales commissions (35% of sales price) The company's fixed expenses each month are: Advertising Depreciation Administrative April May Mary Parsons, the financial vice president, watches sales commissions carefully and has noted that they have risen steadily over the last year. For this reason, she was shocked to find that even though sales have increased, profits for the current month-May-are down substantially from April. Sales, in sets, for the last two months are given below: Req 1A Total Standard Deluxe 6,000 4,000 10,000 3,000 7,000 10,000 Required: 1-a. Prepare contribution format income statements for April. 1-b. Prepare contribution format income statements for May. 3-a. Compute the break-even point in dollar sales for April. 3-b. Would the break-even point in May be higher or lower than the break-even point in April? $ 125,000 $ 27,700 $ 73,000 Complete this question by entering your answers in the tabs below. Variable expenses: Req 1B Fixed expenses: Total variable expenses Total fixed expenses Standard $ 35.00 $ 35.00 Req 3A Prepare contribution format income statements for April. (Round your "Percentage" answers to 1 decimal place (i.e. .1234 should be entered as 12.3).) Req 3B Amount Carbex, Inc. Income Statement For April Standard % Deluxe $ 50.00 $ 40.25 % % % % % % % < Req 1A Deluxe Amount % % % % % % % % Amount Req 1B > Total % % % % % % % %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Transcribed Image Text:Carbex, Inc., produces cutlery sets out of high-quality wood and steel. The company makes a Standard set and a Deluxe set and sells
them to retail department stores throughout the country. The Standard set sells for $100, and the Deluxe set sells for $115. The variable
expenses associated with each set are given below.
Variable production costs
Sales commissions (35% of sales price)
The company's fixed expenses each month are:
Advertising
Depreciation
Administrative
April
May
Mary Parsons, the financial vice president, watches sales commissions carefully and has noted that they have risen steadily over the
last year. For this reason, she was shocked to find that even though sales have increased, profits for the current month-May-are
down substantially from April. Sales, in sets, for the last two months are given below:
Req 1A
Standard Deluxe
6,000 4,000
3,000
7,000
$ 125,000
$ 27,700
$ 73,000
Required:
1-a. Prepare contribution format income statements for April.
1-b. Prepare contribution format income statements for May.
3-a. Compute the break-even point in dollar sales for April.
3-b. Would the break-even point in May be higher or lower than the break-even point in April?
Variable expenses:
Complete this question by entering your answers in the tabs below.
Req 1B
Fixed expenses:
Total variable expenses
Total
10,000
10,000
Total fixed expenses
Standard
$35.00
$ 35.00
Req 3A
Prepare contribution format income statements for April. (Round your "Percentage" answers to 1 decimal place (i.e. .1234 should be entered
as 12.3).)
Req 3B
Amount
Carbex, Inc.
Income Statement For April
Standard
%
Deluxe
$50.00
$ 40.25
%
%
%
%
%
%
%
< Req 1A
Deluxe
Amount
%
%
%
%
%
%
%
%
Amount
Req 1B >
Total
%
%
%
%
%
%
%
%
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 5 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education