### Exercise 7-50: Break-Even Units, Contribution Margin Ratio, Multiple-Product Break-even, Margin of Safety, Degree of Operating Leverage**Jellico Inc.'s projected operating income** (based on sales of 450,000 units) for the coming year is as follows:| | Total ||---------------------------|--------------|| Sales | $11,700,000 || Total variable cost | $8,190,000 || Contribution margin | $3,510,000 || Total fixed cost | $2,254,200 || Operating income | $1,255,800 |**Required:**1. Compute: - (a) Variable cost per unit - (b) Contribution margin per unit - (c) Contribution margin ratio - (d) Break-even point in units - (e) Break-even point in sales dollars2. How many units must be sold to earn an operating income of $296,400?3. Compute the additional operating income that Jellico would earn if sales were $50,000 more than expected.4. For the projected level of sales, compute the margin of safety in units, and then in sales dollars.5. Compute the degree of operating leverage. *(Note: Round answer to two decimal places.)*6. Compute the new operating income if sales are 10% higher than expected.

Name: ### Exercise 7-50: Break-Even Units, Contribution Margin Ratio, Multi
Uploaded: 2022-05-24T13:26:03.000Z
Channel: Bartleby
Description: ### Exercise 7-50: Break-Even Units, Contribution Margin Ratio, Multiple-Product Break-even, Margin of Safety, Degree of Operating Leverage**Jellico Inc.'s projected operating income** (based on sales of 450,000 units) for the coming year is as foll

Contribution margin refers to the remaining amount of revenue that the company has after paying off…

Business

Accounting

ercise 7-50 Break-Even Units, Contribution Margin Ratio, Multiple-P reak-even, Margin of Safety, Degree of Operating Leverage llico Inc's projected operating income (based on sales of 450,000 units) for the coming year as follows: Total Sales $11,700,000 Total variable cost 8,190,000 Contribution margin Total fixed cost $ 3,510,000 2,254,200 $ 1,255,800 Operating income equired: 1. Compute: (a) variable cost per unit, (b) contribution margin per unit, (c) contribution margin ratio, (d) break-even point in units, and (e) break-even point in sales dollars.

ercise 7-50 Break-Even Units, Contribution Margin Ratio, Multiple-P reak-even, Margin of Safety, Degree of Operating Leverage llico Inc's projected operating income (based on sales of 450,000 units) for the coming year as follows: Total Sales $11,700,000 Total variable cost 8,190,000 Contribution margin Total fixed cost $ 3,510,000 2,254,200 $ 1,255,800 Operating income equired: 1. Compute: (a) variable cost per unit, (b) contribution margin per unit, (c) contribution margin ratio, (d) break-even point in units, and (e) break-even point in sales dollars.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Exercise 11-15A (Algo) Using contribution margin format income statement to measure the magnitude of operating leverage LO 11-3, 11-4 The following income statement was drawn from the records of Benson, a merchandising firm: BENSON COMPANY Income Statement For the Year Ended December 31 Sales revenue (4,500 units × $163) $ 733,500 Cost of goods sold (4,500 units × $82) (369,000 ) Gross margin 364,500 Sales commissions (5% of sales) (36,675 ) Administrative salaries expense (85,000 ) Advertising expense (34,000 ) Depreciation expense (48,000 ) Shipping and handling expenses (4,500 units × $3) (13,500 ) Net income $ 147,325 Required Reconstruct the income statement using the contribution margin format. Calculate the magnitude of operating leverage. Use the measure of operating leverage to determine the amount of net income Benson will earn if sales increase by 20 percent.
Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows: EstimatedFixed Cost Estimated Variable Cost(per unit sold) Production costs: Direct materials — $19 Direct labor — 13 Factory overhead $105,800 10 Selling expenses: Sales salaries and commissions 22,000 4 Advertising 7,400 — Travel 1,700 — Miscellaneous selling expense 1,800 4 Administrative expenses: Office and officers' salaries 21,500 — Supplies 2,600…
Question 2 The following monthly data in contribution format are available for the Ross Company and its only product. Product SD: Sales Variable expenses Contribution margin Fixed expenses Net operating income Total $ $ $ $ $ 381,600 304.800 76,800 34,500 42,300 Per Unit $ 5 159 127 32 The company produced and sold 2,400 units during the month and had no beginning or ending inventories. a) What is the current operating leverage? b) Projections indicate that the market will worsen by 15% next month. What is the projected net operating income given this increase?
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
Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales (10,500 units at $225 each) Variable costs (10,500 units at $180 each) Contribution margin Fixed costs Income $ 2,362,500 1,890,000 472,500 369,000 $ 103,500 Exercise 5-18 (Algo) Evaluating strategies-price increase LO C2 If the company raises its selling price to $240 per unit. 1. Compute Hudson Company's contribution margin per unit. 2. Compute Hudson Company's contribution margin ratio. 3. Compute Hudson Company's break-even point in units. 4. Compute Hudson Company's break-even point in sales dollars. 1. Contribution margin 2. Contribution margin ratio 3. Break-even in units 4. Break-even sales dollars per unit % units
Contribution Margin Molly Company sells 32,000 units at $39 per unit. Variable costs are $29.25 per unit, and fixed costs are $174,700. Determine (a) the contribution margin ratio, (b) the unit contribution margin, and (c) operating income. a. Contribution margin ratio (Enter as a whole number.) b. Unit contribution margin (Round to the nearest cent.) $4 per unit c. Operating income
ch7-50 Jellico Inc.'s projected operating income (based on sales of 450,000 units) for the coming year is as follows: Total Sales $ 12,150,000 Total variable cost 7,533,000 Contribution margin $ 4,617,000 Total fixed cost 2,875,878 Operating income $ 1,741,122 Required: 1(a). Compute variable cost per unit. Enter your answer to the nearest cent.$per unit 1(b). Compute contribution margin per unit. Enter your answer to the nearest cent.$per unit 1(c). Compute contribution margin ratio. % 1(d). Compute break-even point in units. units 1(e). Compute break-even point in sales dollars.$ 2. How many units must be sold to earn operating income of $376,542? units 3. Compute the additional operating income that Jellico would earn if sales were $50,000 more than expected.$ 4. For the projected level of sales, compute the margin of safety in units, and then in sales dollars. Margin of safety in units units Margin of safety in sales dollars $ 5. Compute the degree…
Cost Volume Profit Total Company produces one type of machine with the following costs and revenues for the year: Total revenues $4,200,000 Total fixed costs $1,400,000 Total variable costs $2,800,000 Total units produced and sold 700,000 a calculate the breakeven in unit b calculate the quantity that would produce an operating profit of $100000 c calculate the quantity that would produce an operating profit of 10 percent of sales dollars d calculate the breakeven quantity if sales increased by 20 perc ent e calculate the operating margin if 50000 unit are sold
Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows: EstimatedFixed Cost Estimated Variable Cost(per unit sold) Production costs: Direct materials — $28 Direct labor — 19 Factory overhead $495,200 14 Selling expenses: Sales salaries and commissions 102,900 6 Advertising 34,800 — Travel 7,700 — Miscellaneous selling expense 8,500 6 Administrative expenses: Office and officers' salaries 100,600 — Supplies 12,400…
05 quired information [The following information applies to the questions displayed below.] Hudson Company reports the following contribution margin income statement. Sales (9,700 units at $280 each) Variable costs (9,700 units at $210 each) Contribution margin Fixed costo Income HUDSON COMPANY Contribution Margin Income Statement. For Year Ended December 31 1. Amount of sales 2. Margin of safety $ 2,716,000 2,037,000 1. Assume Hudson has a target income of $163,000. What amount of sales (in dollars) is needed to produce this target income? 2. If Hudson achieves its target income, what is its margin of safety (in percent)? (Round your answer to 1 decimal place.) % 679,000 441,000 $ 238,000
Contribution Margin Ratio, Break-Even Sales Revenue, Sales Revenue for Target Profit Schylar Pharmaceuticals, Inc., plans to sell 135,000 units of antibiotic at an average price of $23 each in the coming year. Total variable costs equal $1,055,700. Total fixed costs equal $7,900,000. Required: 1. What is the contribution margin per unit? Round the answer to the nearest cent.$fill in the blank 1 What is the contribution margin ratio? Round the answer to two decimal places. (Express as a decimal-based answer rather than a whole percent amount.)fill in the blank 2 2. Calculate the sales revenue needed to break even. Round the answer to the nearest dollar.$fill in the blank 3 3. Calculate the sales revenue needed to achieve a target profit of $215,000. Round the answer to the nearest dollar.$fill in the blank 4 4. What if the average price per unit increased to $24.50? Recalculate the following: a. Contribution margin per unit. Round the answer to the nearest cent.$fill in the blank 5 b.…
Hudson Company reports the following contribution margin income statement. \table[[\table[[HUDSON COMPANY], [Contribution Margin Income Sta], [For Year Ended December 3]],], [\table [[Sales units at $225 each)], [Variable costs units at $180 each)], [Contribution margin], [Fixed costs]],\table[[$2,160,000