EXERCISE 2-4 Computing and Using the CM Ratio LO2-3Last month when Holiday Creations, Inc., sold 50,000 units, total sales were $200,000, total vari-able expenses were $120,000, and fixed expenses were $65,000.Required:What is the company's contribution margin (CM) ratio?What is the estimated change in the company's net operating income if it can increase totalsales by $1,000?1.2.Taoine Roont mos of bloCante Sallind Drice and Volume 102-4W

1.Contribution margin = Total sales - Total Variable Cost

Answered: EXERCISE 2-4 Computing and Using the CM…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Problem #5 Assume the following business and financial data for the L&N Trucking Company: The L&N Trucking Company achieved total miles driven of 2,425,000 systemwide for their latest fiscal year. For the latest fiscal year, the trucking company earned average revenue of $5.48 per mile driven. L&N Trucking's average variable cost per mile driven for the year was $2.85. The trucking company's total fixed costs for the year were $1,857,000. 5a) Show the cost-volume-profit (CVP) income statement for L&N Trucking, including contribution margin and net income, in both total dollars and per unit. 5b) Calculate the trucking company's breakeven level in both total sales dollars and units 5c) Compute L&N Trucking's margin of safety and margin of safety ratio, based on the latest year's results.
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Question 6 of 10 Moving to another question will save this response. Question 6 Javed Corporation produces and sells a single product, has provided its contribution format income statement for March. Sales (17,000 units) Rs. 2,210,000 Variable Expenses 1,530,000 Contribution Margin 680,000 Fixed Cost 250,000 Net Profit 430,000 Number of units to be sold so that target profit of Javed Corporation increased by Rs. 48,000?
Question 3Study the scenario and complete the questions that follow:Nonna Greco LimitedNonna Greco Limited manufactures and sells Italian HIP sunglasses. The following information relatesto January 2020:Units manufactured and sold: 500Income statement:RSales 261 500Less: Manufacturing costs 223 000Material 75 000Labour 50 000Manufacturing overheads (@ R20 per machine hour) 98 00038 500Less: Selling and administrative expenses (60% fixed) 17 500Net profit 21 000The following changes will come into effect on 1 February 2020: A sales price increase of 10%, resulting in a 5% decrease in sales volume. Due to negotiations with the labour union, the labour rate per hour will increase by 6%. It is expected that material costs will increase by 10%.The variable budget for manufacturing overheads indicates a total cost ofR94 400 at a capacity utilisation of 4 600 hours.Source: Hunde, T. (2020)Required:3.1 Calculate the total marginal income and marginal income per unit for the year ended 1…
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4. Confirm your calculations in Requirement 3 above by increasing the unit sales in your worksheet by 20% so that the Data area looks like this: 1 Chapter 6: Applying Excel 2 3 Data 4 Unit sales 5 Selling price per unit 6 Variable expenses per unit 7 Fixed expenses 8 12,000 units 50 per unit 20 per unit $ $ $ 240,000
QUESTION 3 REQUIRED Study the information provided below and calculate the following independently: 3.4 3.5 The total Marginal Income and Net Profit/Loss, if the selling price is adjusted to R90 per unit and the non-manufacturing fixed costs decrease by R20 000. The number of units that must be sold to earn a net profit of R1 440 000, if the variable costs increase by 10%. INFORMATION Ascot Ltd manufactures shirts. The following information was extracted from the budget for the month ended 28 February 2023: Sales Selling price per unit Direct material cost per unit Direct labour cost per unit Variable manufacturing overhead costs per unit Sales commission Fixed manufacturing overhead costs Fixed selling and administrative costs 50 000 units R100 R30 R18 R7 R5 per unit sold R400 000 R200 000
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