Cary Corporation produces and sells a single product Data concerning that product appear below Per Unit Percent of Sales Selling price Variable expenses $ 170 100% 68 40% Contribution margin $ 102 Fixed expenses are $521,000 per month. The company is currently selling 7,000 units per month. Management is considering using a new component that would increase the unit variable cost by $6. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 500 units. What should be the overall effect on the company's monthly 60% net operating income of this change? Select one O A increase of $6,000 OB decrease of $6,000 Oc decrease of $48,000 OD increase of $48,000

Cary Corporation produces and sells a single product Data concerning that product appear below Per Unit Percent of Sales Selling price Variable expenses $ 170 100% 68 40% Contribution margin $ 102 Fixed expenses are $521,000 per month. The company is currently selling 7,000 units per month. Management is considering using a new component that would increase the unit variable cost by $6. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 500 units. What should be the overall effect on the company's monthly 60% net operating income of this change? Select one O A increase of $6,000 OB decrease of $6,000 Oc decrease of $48,000 OD increase of $48,000

Name: Cary Corporation produces and sells a single product Data concerning
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Description: Cary Corporation produces and sells a single product Data concerning that product appear belowPer UnitPercent of SalesSelling priceVariable expenses$ 170100%6840%Contribution marginS 10260%Fixed expenses are $521,000 per month The company is current

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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Current Attempt in Progress Nancy is helping her company consider a change in its CVP relationship to increase profitability. Currently, the company is selling 14,200 units, generating $78,700 in operating income. The contribution margin is $29 per unit, while total variable costs are $298,200. What amount of fixed costs does the company currently incur? Fixed costs $ If it increases its selling price by 10% while expecting volume to drop by just 5%, will the company achieve its goal? New operating income $ The company ✓ its goal.
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Chovanec Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Selling price $ 170 100% Variable expenses 68 40% Contribution margin $ 102 60% Fixed expenses are $521,000 per month. The company is currently selling 7,000 units per month. Management is considering using a new component that would increase the unit variable cost by $6. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 500 units. What should be the overall effect on the company's monthly net operating income of this change? Multiple Choice increase of $6,000 decrease of $6,000 decrease of $48,000 increase of $48,000
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Majesty Company uses target costing to ensure that its products are profitable. Assume Majesty is planning to introduce a new product with the following estimates: Estimated market price $ 1,500 Annual demand 86,000 units Life cycle 7 years Target profit 26 % return on sales Required: 1. Compute the target cost of this product. 2. Compute the target cost if Majesty wants a 36 percent return on sales. 3. Compute the target cost if Majesty wants a 7 percent return on sales.
Current Attempt in Progress Blossom Company reports the following operating results for the month of August: sales $300,000 (units 5,000); variable costs $210,000; and fixed costs $70,000. Management is considering the following independent courses of action to increase net income. Compute the net income to be earned under each alternative. 1. Increase unit selling price by 10% with no change in total variable costs or sales volume. O Net income $ 2. Reduce variable costs to 55% of sales. Net income $ 3. Reduce fixed costs by $18,000. Net income $ Which course of action will produce the highest net income? Bave for Later 100 2 Attempts: 0 of 1 used Submit Answer
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