Consider the following information from the income statement of Leighton Company:Contribution margin ratio 40%Fixed expenses $140,000Selling price $100Target profit $120,000Unit contribution margin $40What are the sales dollars required to attain a target profit of $120,000? multiple choiceA. $60,000B. $400,000C. $10,000D. $300,000

Break-even point (BEP): Breakeven is the point where total expenses are equal to total revenue. At…

Answered: Consider the following information from…

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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Schister Systems uses the following data in its Cost-Volume-Profit analyses: Total Sales $ 325,000 Variable expenses 195,000 Contribution margin 130,000 Fixed expenses 105,000 Net operating income $ 25,000 What is total contribution margin if sales volume increases by 30%? Multiple Choice $17,500 $130,000 $32,500 $169,000
We sell two products: Product #1 Product #2 Total Sales $200,000 $400,000 $600,000| Variable Expenses 120,000 350,000 470,000 Contribution Margin 80,000 50,000 130,000 CM Ratio 40% 12.5% 21.67% Fixed Expenses total $30,000. What is the breakeven point based on the current sales mix? A. $600,000 B. $75,000 C. $138,440 D. $240,000 4.
Assume a retailing company has two departments-Department A and Department B. The company's most recent contribution format income statement follows: Total Department A Department B $ 800,000 350,000 450,000 $ 350,000 250,000 Sales $ 450,000 Variable expenses Contribution margin 100,000 100,000 350,000 Fixed expenses 400,000 140,000 260,000 Net operating income (loss) $ 50,000 $ (40,000) $ 90,000 The company says that $60,000 of the fixed expenses being charged to Department A are sunk costs or allocated costs that will continue if the segment is discontinued. However, if Department A is discontinued the sales in Department B will drop by 18%. What is the financial advantage (disadvantage) of discontinuing Department A? Multiple Choice $(103,000) $(83,000) $(92,000) $(101,000)
Given a profit margin = 10%, ROE = 20%, D/E = 1.5, and assets = $200, calculate sales. Multiple Choice O O $10 O $160 O $250 $640 O $1,000
B. Consider the following: Total variable costs $200,000 Total fixed costs $150,000 Annual volume of units 500 Average invested capital $400,000 Target Return on investment 20.0% To the nearest tenth, what is the markup percentage required to earn the target return on investments using the cost-plus formula based on total costs?
Assume the following information: Amount Per Unit Sales $ 300,000 $ 40 Variable expenses 120,000 16 Contribution margin 180,000 $ 24 Fixed expenses 60,000 Net operating income $ 120,000 If the company decides to pay a sales commission of 2.5% for each unit sold above the break-even point, what net operating income will it earn if it sells 4,600 units? Multiple Choice $50,800 $45,800 $50,400 $48,300
Assume the following information: Amount Per Unit Sales $ 600,000 $ 40 Contribution margin $ 360,000 $ 24 Net operating income $ 240,000 If the selling price per unit increases by 8% and unit sales drop by 6%, then the best of estimate of the new net operating income is: Multiple Choice $263,520. $243,520. $253,520. $233,520.
Data Sales $25,000,000 Net operating income $3,000,000 Average operating assets $9,000,000 Minimum required rate of return 25% Enter a formula into each of the cells marked with a ? below Review Problem: Return on Investment (ROI) and Residual Income Compute the ROI Margin ? Turnover ? ROI ? Compute the residual income Average operating assets ? Net operating income ? Minimum required return ? Residual income ?
HELP
Calculate the Operating Leverage for a business given the following data: Sales = $300,000.00 Variable Costs = 75% of Sales Operating Income = $40,000.00 Group of answer choices a. 0 b. 7.500 c. 1.875 d. 1.333
10. The income statement for Jeeves Ltd for 2015 is shown below: Sales (100 000 units) $40 000 Variable cost $24 000 Contribution margin $16 000 Fixed costs $12 000 Net Income $ 4000 What is the contribution margin ratio? A. 10% В. 30% C. 40% D. 60% 11. What is the difference between total sales in dollars and total variable expenses called? A Net operating income B. Net profit C. The gross margin D. The contribution margin 12. How is the margin of safety computed? A Break-even'total sales B. Total sales - Break-even sales
Sales $48,000 Variable Expenses $32,000 Contribution Margin $16,000 Fixed Expenses $13,000 Net Operating Income $3,000 8.1 What is the contribution margin per unit? 8.2 What is the contribution margin ratio? 8.3 If sales increased to 1,010, what would be the increase in net operating income? 8.4 If sales decreased to 950, what would be the net operating income? 8.5 What is the breakeven point in units? Round up to nearest unit 8.6 How many units must be sold to achieve a target profit of $7,000? 8.7 What is the margin of safety in dollars and in percentage? 8.8 What is the degree of operating leverage? Consider the following for Sports Stuff Corporation. The following contribution format income statement is based on a sales volume of 1,000 units. The relevant range is 700 to 1,400 units. 8.9 If the selling price increased by $4 but the sales volume decreased by 10%, what would be the net operating income? 8.10 If the company…

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