Contribution margin $ 26, 100 $ 10, 600 $ 25, 400 Fixed costs allocated to each product line10, 980 15, 840 21, 360

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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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4) Assume sales and demand are 1,000 units, how much will the company make on the sale of the next two units if demand expands to 1,002 units. Discuss which amounts on the income statement will change if the company makes and sells two more units. Please discuss your calculations and reference to Figure 1.
Amount Sales 123,000 Variable expenses 49,200 Contribution margin 73,800 Fixed expenses 24,000 Net operating income 49,800 Determine the degree of operating leverage? %24
Vegas Company has the following unit costs: Variable manufacturing overhead $ 30 Direct materials 25 Direct labor 24 Fixed manufacturing overhead 17 Variable marketing and administrative 8 Vegas produced and sold 13,500 units. If the product sells for $115, what is the contribution margin? Multiple Choice $148,500 $486,000 $256,500 $378,000
Contribution Margin I/S: Recast Exercise Sold (Unit) 10,000 Sales Variable expenses Contribution margin Fixed expenses Net Income 100,000 60,000 40,000 30,000 10,000 Per unit $10 $6 $4 (3) (5 7,500 Per unit $10 $6 $4 (6) (7) (8) (9) 12,000 11. Per unit ratios $10 12 $6 (13) $4
If variable manufacturing cost £5 per unit Fixed costs £10,000 avoidable Fixed costs £20,000 committed Budgeted production 5,000 units The maximum buy in price is equal to: A £5 B £6 C £7 D £8
Harris Company manufactures and sells a single product. A partially completed schedule of the company's total costs and costs per unit over the relevant range of 52,000 to 92,000 units is given below: Required: 1. Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. 2. Assume that the company produces and sells 82,000 units during the year at a selling price of $9.56 per unit. Prepåre a contribution format income statement for the year.
Sales revenue (1000 units) $20,000 Fixed costs $29,000 Contribution margin ration 60%, what is the variable cost per unit?
X Company Y Company Amount Percent Amount Percent Sales $ 148,000 100.00 $ 148,000 100.00 Variable costs 88,800 60.00 44,400 30.00 Contribution margin 59,200 40.00 103,600 70.00 Fixed costs 34,150 70,200 Operating income (Tig) 25,050 33,400 Y Company's margin of safety (MOS) in sales dollars (rounded) is:
If sales are $720,000, variable costs are 58% of sales, and operating income is $68,000, what is the contribution margin? Group of answer choices $302,400 $417,600 42% $234,400
7. Division X produces a single product for both Division Y and an external market. It has spare capacity to produce another 20,000 items. Additional details for Division X are as follows: Information for Division X Price of product sold to outside market Current transfer price Variable cost per item made in division Fixed costs per item (based on budget) Division Y has requested a further 5,000 items. £25 £20 £12 £6 What is the minimum price that Division X should ask per item? (a) £12 (b) £18 (c) £20 (d) £25
What is the expected added profit from the Challenger line ? Challenger Bikes Selling Price per Unit Materials Direct Labour Overhead (40% Variable) Total Per Unit Relevant Cost Estimated Additional Contribution Margin Estimated Sales Unit Estimated Increase in profit $39.80 19.6 9.8 (40%*24.50) $69.20 $92.29 $69.20 $23.09 25000 $577,250
Service Emphasis The following analysis of selected data is for each of the two services Rockville Corporation provides. Service G Service H Per-unit data at 10,000 services Sales price Service costs: Variable Fixed Selling and administrative expenses: Variable Fixed $ Revenue Less: Variable cost Contribution margin Labor hours per unit Contribution margin per labor hour $ $36 $ 19 6 G 5 3 In the Rockville's operation, labor capacity is the company's constraining resource. Each unit of G requires 3 hours of labor, and each unit of H requires 1 hours of labor. Assuming that all service can be sold at a normal price, prepare an analysis showing which of the two services should be provided with any unused productive capacity that Rockville might have. Service $23 36 $ 25 X 11 * $ 3 3.67 × $ 15 4 2 1 H 23 19 x 4 x 1 4 × Any unused capacity should be devoted to Service H, which has $2 less contribution margin per labor hour than does Service G. Any unused capacity should be devoted to…

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Contribution margin $ 26, 100 $ 10, 600 $ 25, 400 Fixed costs allocated to each product line 10, 980 15, 840 21, 360