Ever Stone Corporation has a contribution margin ratio of 30%. The company is considering a proposal that will increase sales by $120,000. What increase in profit can be expected, assuming total fixed costs increase by $25,000?
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- Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22 each in the coming year. Total variable costs equal 1,086,800. Total fixed costs equal 8,000,000. (Round all ratios to four significant digits, and round all dollar amounts to the nearest dollar.) Required: 1. What is the contribution margin per unit? What is the contribution margin ratio? 2. Calculate the sales revenue needed to break even. 3. Calculate the sales revenue needed to achieve a target profit of 245,000. 4. What if the average price per unit increased to 23.50? Recalculate: a. Contribution margin per unit b. Contribution margin ratio (rounded to four decimal places) c. Sales revenue needed to break even d. Sales revenue needed to achieve a target profit of 245,000If the contribution margin ratio solve this question
- A company requires $1400000 is sales to meet its net income target. Its contribution margin is 50% and fixed costs are $300000. What is the company's target net income?Hello, I have the following question. D&R Corp. has annual revenues of $284,000, an average contribution margin of 35%, and fixed expenses of $100,500. A. Management is considering adding a new product to the company's product line. The new item will have $8.6 of variable costs per unit. Calculate the selling price that will be required if this product is not to affect the average contribution margin ratio. (I got $13.23 per unit). B. If the new product adds an additional $31,300 to D&R's fixed expenses, how many units of the new product must be sold at the price calculated in part A to break-even on the new product? (Do not round immediate calculations). C. If 28,800 units of the new product could be sold at a price of $13.8 per unit, and the company's other business did not change, calculate D&R's total operating income and average contribution margin ratio. (Round your intermediate calculations to 2 decimal places. Round average contribution margin ratio to 2…Swifty Corporation is planning to sell 810000 units for $1.50 per unit. The contribution margin ratio is 20% . If Swifty will break even at this level of sales, what are the fixed costs? O $810000 $567000. O $930000. $243000.
- The current situation of XZ company is as follows: Variable costs are 84% of sales and fixed costs are $40 000. a) A suggestion is made to improve the profit by increasing the contribution margin. If the contribution margin can be improved by 6% of sales by increasing fixed costs by $10 000, will the break even point be lower? b) If sales are currently $300 000, will the profit be better, assuming no increase in sales?How many units must it sell?Sedgwick Inc. is considering Plan 1 which is estimated to have sales of $40,000 and costs of $15,500. The company currently has sales of $37,000 and costs of $14,000.Compare plans using incremental analysis. If Plan 1 is selected, there would be incremental decreaseincrease in profit by $ .
- Friedman Co. is considering adding a new product. Based on preliminary market research, the company has decided that the price of the product should be $47. If the company's profit margin is 22 percent of revenues, what should the target cost be? $A company is analyzing its break-even point for a product with a selling price of $50 per unit. The variable cost per unit is $30, and the fixed costs are $200,000 per year. If the company wants to achieve a profit of $50,000, how many units must it sell to meet this profit goal?In 200A, the company’s sales was P500,000. Its fixed costs amounts to P100,000 per year. In 200B, sales was higher, while profit was P30,000 higher than the 200A figures. For 200C, the company expects to have sales that is twice as much as the 200A sales. The expected increase in production to meet the sales demand in 200C will not require the company exceed its normal capacity. Required: How can you show that the company’s contribution margin ratio is 30% How can you show that the profit the company expect to earn in 200C is 200,000 Can you determine the company’s break-even point in units?