Data for Hermann Corporation are snown below:Selling priceVariable expensesContribution marginFixed expenses are $73,000 per month and the company is selling 4,300 units per month.PercentPer Unit of Sales$ 65100%3960$2640%2-a. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $5 per unit and increase unit sales by 25%.2-b. Should the higher-quality components be used?Complete this question by entering your answers in the tabs below.Req 2AReq 2BRefer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $5 per unit and increase unit sales by 25%.

CVP analysis, or cost-volume-profit analysis, is a management accounting technique used to analyze…

Answered: Data for Hermann Corporation are snown…

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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Data concerning Wislocki Corporation's single product appear below: Selling price Variable expenses Contribution margin Per Unit Percent of Sales $ 150 36 100% 24% $ 114 76% Fixed expenses are $1,042,000 per month. The company is currently selling 9,700 units per month. Required: The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $12 per unit. In exchange, the sales staff would accept an overall decrease in their salaries of $104,000 per month. The marketing manager predicts that introducing this sales incentive would increase monthly sales by 330 units. What should be the overall effect on the company's monthly net operating income of this change? Change in net operating income
Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Percent of Per Unit Sales $ 60 Selling price Variable expenses 100% 39 65 Contribution margin $21 35% Fixed expenses are $72,000 per month and the company is selling 4,200 units per month. 2-a. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $4 per unit and increase unit sales by 25%. 2-b. Should the higher-quality components be used? Complete this question by entering your answers in the tabs below. Req 2A Req 2B Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher- quality components that increase the variable expense by $4 per unit and increase unit sales by 25%. Net operating income by
22. Subject :- Accounting
The following data apply to McNally Company for last year: Total variable cost per unit $3.50 Contribution margin/sales 30% Break-even sales (present volume) $1,000,000 Mc Nally wants to sell an additional 50,000 units at the same selling price and contribution margin. By how much can fixed costs increase to generate additional profit equal to 10% of the sales value of the additional 50,000 units to be sold? Group of answer choices $57,500 $125,000 $67,500 $50,000
Assume the following data for Dodge Company for the coming year: Fixed expenses $280,000 Variable cost per unit Selling price per unit $7 $21 Do not enter dollar signs or commas in the input boxes. Round all answers to the nearest whole number. For Unit calculations round your answers up to the nearest whole number. a) How many units must be sold to break even? Break even sales: units b) What would the net income be if 26,200 units were sold? Net income: $ c) How many units must be sold to make a net income of $33,000 assuming selling price per unit is increased by $1.00 Total units to be sold: units
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Margin of Safety Yellow Sticker Company's variable expenses are 40% of sales. The company has monthly fixed expenses of $15,000 and sells each unit for $0.50. The monthly target operating income is $3,750. a. What is the monthly margin of safety in dollars if Yellow Sticker Company achieves its operating income goal? $0 in dollars b. What is the monthly margin of safety in units if Yellow Sticker Company achieves its operating income goal? 0 units
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ces Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Fixed expenses are $72,000 per month and the company is selling 4,200 units per month. Percent Per Unit of Sales $60 100% 39 65 $21 35% Required (see below for a hint if you get stuck): 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,600 and the monthly sales volume increases by 100 units? 1-b. Should the advertising budget be increased? Complete this question by entering your answers in the tabs below. Req 1A Req 1B How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,600, the monthly sales volume increases by 100 units, and the total monthly sales increase by $6,000? (Do not round intermediate calculations.) Net operating income by
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[The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 125 80 $ 45 Fixed expenses are $85,000 per month and the company is selling 2,700 units per month. Req 1A Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,000, the monthly sales volume increases by 100 units, and the total monthly sales increase by $12,500? 1-b. Should the advertising budget be increased? Reg 1B Percent of Sales Complete this question by entering your answers in the tabs below. 100% 64 36% by How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,000, the monthly sales volume increases by 100 units, and the total monthly sales increase by $12,500? Note: Do not round intermediate calculations. Net operating income Req 1A Req 1B >
Lindon Company is the exclusive distributor for an automotive product. The product sells $40 per unit and has a CM ratio of 30%. The company's fixed expenses are $180,000 per year. Required: 1. What are the variable expenses per unit? 2. Using the equation method: a. What is the break-even point in units and sales dollars? b. What sales level in units and in sales dollars is required to earn an annual profit of $60,000? c. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $4 per unit. What is the Company's new break-even point in units and in sales dollars? 3. Repeat (2) above using the unit contribution method.

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