Cost-Volume-Profit Analysis The Rutgers Manufacturing Company manufactures 920 products. Based on a careful cost behavior analysis the traditional income statement was reformatted for internal managerial decision-making: Revenues$1,350,000Variable Costs: Direct Material238,000Direct Labor122,000Manufacturing Overhead115,000Selling Expenses54,000Administrative Expenses15,000 Total Variable Costs544,000Contribution Margin806,000Fixed Costs: Manufacturing Overhead345,000Selling Expenses86,000Administrative Expenses55,000 Total Fixed Costs486,000Profits Before Taxes320,000Taxes112,000Profit After Taxes208,000 Required: Compute the breakeven point in fiscal 2020.Determine the company’s margin of safety in fiscal 2020.Determine the company’s degree of operating leverage in 2020 at the current level of operations. If the company’s sales in dollars were to increase 20%, how much would profits before taxes increase in percentage terms. What would be the dollar value of profits after taxes if sales increased this percentage?Determine the sales level that would have been required in 2020 to achieve a level of profits after taxes of $500,000. Cost-Volume-Profit AnalysisThe Rutgers Manufacturing Company manufactures 920 products. Basedon a careful coststatement was reformatted for internal managerial decision-making:behavior analysis thetraditionalincomeRevenues$1,350,000Variable Costs:Direct Material238,000Direct Labor122,000Manufacturing Overhead115,000Selling ExpensesAdministrative Expenses54,00015,000Total Variable Costs544,000Contribution Margin806,000Fixed Costs:Manufacturing Overhead345,000Selling Expenses86,000Administrative Expenses55,000Total Fixed Costs486,000Profits Before Taxes320,000Taxes112,000Profit After Taxes208,000Required:A. Compute the breakeven point in fiscal 2020.B. Determine the company's margin of safety in fiscal 2020.c. Determine the company's degree of operating leverage in2020 at the current level of operations. If the company'ssales in dollars were to increase 20%, how much wouldprofits before taxes increase in percentage terms.would be the dollar value of profits after taxes if salesincreased this percentage?WhatDetermine the sales level that would have been required in2020 to achieve a level of profits after taxes of $500, 000.D.

Break-even point: This is the point or level of sales at which an entity doesn't make a loss or…

Cost-Volume-Profit Analysis The Rutgers Manufacturing Company manufactures 920 products. Based on a careful cost behavior analysis the traditional income statement was reformatted for internal managerial decision-making: Revenues $1,350,000 Variable Costs: Direct Material 238,000 Direct Labor 122,000 Manufacturing Overhead 115,000 Selling Expenses 54,000 Administrative Expenses 15,000 Total Variable Costs 544,000 Contribution Margin 806,000 Fixed Costs: Manufacturing Overhead 345,000 Selling Expenses 86,000 Administrative Expenses 55,000 Total Fixed Costs 486,000 Profits Before Taxes 320,000 Taxes 112,000 Profit After Taxes 208,000 Required: Compute the breakeven point in fiscal 2020. Determine the company’s margin of safety in fiscal 2020. Determine the company’s degree of operating leverage in 2020 at the current level of operations. If the company’s sales in dollars were to increase 20%, how much would profits before taxes increase in percentage terms. What would be the dollar value of profits after taxes if sales increased this percentage? Determine the sales level that would have been required in 2020 to achieve a level of profits after taxes of $500,000.

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Cost-Volume-Profit Analysis

The Rutgers Manufacturing Company manufactures 920 products. Based on a careful cost behavior analysis the traditional income statement was reformatted for internal managerial decision-making:

Revenues	$1,350,000
Variable Costs:
Direct Material	238,000
Direct Labor	122,000
Manufacturing Overhead	115,000
Selling Expenses	54,000
Administrative Expenses	15,000
Total Variable Costs	544,000
Contribution Margin	806,000
Fixed Costs:
Manufacturing Overhead	345,000
Selling Expenses	86,000
Administrative Expenses	55,000
Total Fixed Costs	486,000
Profits Before Taxes	320,000
Taxes	112,000
Profit After Taxes	208,000

Required:

Compute the breakeven point in fiscal 2020.
Determine the company’s margin of safety in fiscal 2020.
Determine the company’s degree of operating leverage in 2020 at the current level of operations. If the company’s sales in dollars were to increase 20%, how much would profits before taxes increase in percentage terms. What would be the dollar value of profits after taxes if sales increased this percentage?
Determine the sales level that would have been required in 2020 to achieve a level of profits after taxes of $500,000.

Cost-Volume-Profit Analysis
The Rutgers Manufacturing Company manufactures 920 products. Based
on a careful cost
statement was reformatted for internal managerial decision-making:
behavior analysis the
traditional
income
Revenues
$1,350,000
Variable Costs:
Direct Material
238,000
Direct Labor
122,000
Manufacturing Overhead
115,000
Selling Expenses
Administrative Expenses
54,000
15,000
Total Variable Costs
544,000
Contribution Margin
806,000
Fixed Costs:
Manufacturing Overhead
345,000
Selling Expenses
86,000
Administrative Expenses
55,000
Total Fixed Costs
486,000
Profits Before Taxes
320,000
Taxes
112,000
Profit After Taxes
208,000
Required:
A. Compute the breakeven point in fiscal 2020.
B. Determine the company's margin of safety in fiscal 2020.
c. Determine the company's degree of operating leverage in
2020 at the current level of operations. If the company's
sales in dollars were to increase 20%, how much would
profits before taxes increase in percentage terms.
would be the dollar value of profits after taxes if sales
increased this percentage?
What
Determine the sales level that would have been required in
2020 to achieve a level of profits after taxes of $500, 000.
D.

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