Evergreen Fertilizer Company produces fertilizer. The company's fixed monthly cost is $25,000.00, and its variable per pound of fertilizer is $0.15. Evergreon sells the fertilizer for $0.40 per pound. a) Determine the break-even volume for the company. What is the Contribution Margin? b) If Evergreen Fertilizer Companychanges the price of its fertilizer from $0.40 per pound to $0.60 per pound. Wha will the change have on the break-even volume. What is the Contribution Margin? c) Using the price of $0.60 per pounds, if Evergreen Fertilizer Companyc hanges its production process to add a we killer to the fertilizer in order to increase sales, the variable cost per pound will increase from $0.15 to $0.22. What will this change have on the break-even volume.

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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Question
E
F
G
H
a)
Fixed Cost
Variable cost
In the Formula box type in the formula in words that you
I used
Price =
to calculate the answer.
Ibs. per month
Fomula:
What is the Contribution Margin?
Formula:
b)
New Price =
Ibs. per month
Fomula:
What is the Contribution Margin?
Formula:
c)
New Variable cost =
Ibs.
Fomula:
What is the Contribution Margin?
Fomula:
d)
New Fixed cost =
New Variable cost =
New Price =
%3D
Ibs.
Fomula
Prob 2
Instructions
Prob j
Prob 2
:1 of 1
Transcribed Image Text:E F G H a) Fixed Cost Variable cost In the Formula box type in the formula in words that you I used Price = to calculate the answer. Ibs. per month Fomula: What is the Contribution Margin? Formula: b) New Price = Ibs. per month Fomula: What is the Contribution Margin? Formula: c) New Variable cost = Ibs. Fomula: What is the Contribution Margin? Fomula: d) New Fixed cost = New Variable cost = New Price = %3D Ibs. Fomula Prob 2 Instructions Prob j Prob 2 :1 of 1
Arial
10
v A A
2 Wrap Text v
General
$ v % 9
00
0
Conditional Format,
Formatting as Table Styles
Cell
Paste
BIUV
v A v
2 Merge & Center v
.00
39
Xv fx
B
E
F
G
H
1
Evergreen Fertilizer Company produces fertilizer. The company's fixed monthly cost is $25,000.00, and its variable
per pound of fertilizer is $0.15. Evergreen sells the fertilizer for $0.40 per pound.
cost
4
a) Determine the break-even volume for the company. What is the Contribution Margin?
6
b) If Evergreen Fertilizer Companychanges the price of its fertilizer from $0.40 per pound to $0.60 per pound. Wha
will the change have on the break-even volume. What is the Contribution Margin?
7
t effect
8
9
c) Using the price of $0.60 per pounds, if Evergreen Fertilizer Companyc hanges its production process to ad a we
killer to the fertilizer in order to increase sales, the variable cost per pound will increase from $0.15 to $0.22. What
10
eed
11
t effect
12
will this change have on the break-even volume.
13
d) If Evergreen Fertilizer Company increases its advertising expenditures by $14,000 per year and using variable co
$0.22 and price of $0.60, what effect will the increase have on the break-even volume.
14
st of
15
16
17
18
19
20
a)
Fixed Cost
21
22
Variable cost
In the Formula box type in the formula in words that you
to calculate the answer,
23
i used
24
Price =
25
26
V =
Ibs. per month
Formula:
27
28
What is the Contribution Margin?
Fomula:
29
30
b)
New Price =
31
32
*33
Ibs. per month
Formula:
34
35
What is the Contribution Margin?
Fomula
36
37
c)
New Variable cost =
38
39
40
V =
Ibs.
Fornula:
41
/-
42
What is the Contribution Margin?
43
Formula:
.44
d)
New Fixed cost =
New Variable cost =
45
46
Instructions
Prob 1
Prob 2
+
| 三
Transcribed Image Text:Arial 10 v A A 2 Wrap Text v General $ v % 9 00 0 Conditional Format, Formatting as Table Styles Cell Paste BIUV v A v 2 Merge & Center v .00 39 Xv fx B E F G H 1 Evergreen Fertilizer Company produces fertilizer. The company's fixed monthly cost is $25,000.00, and its variable per pound of fertilizer is $0.15. Evergreen sells the fertilizer for $0.40 per pound. cost 4 a) Determine the break-even volume for the company. What is the Contribution Margin? 6 b) If Evergreen Fertilizer Companychanges the price of its fertilizer from $0.40 per pound to $0.60 per pound. Wha will the change have on the break-even volume. What is the Contribution Margin? 7 t effect 8 9 c) Using the price of $0.60 per pounds, if Evergreen Fertilizer Companyc hanges its production process to ad a we killer to the fertilizer in order to increase sales, the variable cost per pound will increase from $0.15 to $0.22. What 10 eed 11 t effect 12 will this change have on the break-even volume. 13 d) If Evergreen Fertilizer Company increases its advertising expenditures by $14,000 per year and using variable co $0.22 and price of $0.60, what effect will the increase have on the break-even volume. 14 st of 15 16 17 18 19 20 a) Fixed Cost 21 22 Variable cost In the Formula box type in the formula in words that you to calculate the answer, 23 i used 24 Price = 25 26 V = Ibs. per month Formula: 27 28 What is the Contribution Margin? Fomula: 29 30 b) New Price = 31 32 *33 Ibs. per month Formula: 34 35 What is the Contribution Margin? Fomula 36 37 c) New Variable cost = 38 39 40 V = Ibs. Fornula: 41 /- 42 What is the Contribution Margin? 43 Formula: .44 d) New Fixed cost = New Variable cost = 45 46 Instructions Prob 1 Prob 2 + | 三
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