EXERCISE 2-8 Compute the Margin of Safety L02-7Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning thenext month's budget appear below:Selling price per unitVariable expense per unit.Fixed expense per month.Unit sales per month$30$20y's$7,5001,000Required: Vai Wolfor mor si to does mi bloz gnied zi loubong ano art som jedi smuA1. What is the company's margin of safety?2. What is the company's margin of safety as a percentage of its sales?

Answered: EXERCISE 2-8 Compute the Margin of…

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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TB Problem Qu. 9-401 (Algo) Cryan Jeep Tours operates jeep tours... Cryan Jeep Tours operates jeep tours in the heart of the Colorado Rockies. The company bases its budgets on two measures of activity (i.e., cost drivers), namely guests and jeeps. One vehicle used in one tour on one day counts as a jeep. Each jeep has one tour guide. The company uses the following data in its budgeting: Actual guests Actual jeeps Revenue Expenses: Revenue Tour guide wages. Vehicle expenses. Administrative expenses In May, the company budgeted for 497 guests and 202 jeeps. The company's income statement showing the actual results for the month appears below: Cryan Jeep Tours Income Statement For the Month Ended May 31 Tour guide wages Vehicle expenses Administrative expenses Total expense Net operating income Guests Jeeps Revenue Expenses: Fixed element per month $0 $0 Tour guide wages Vehicle expenses Administrative expenses Total expense Net operating income $ 5,600 $ 2,100 512 197 $ 87,854 Required:…
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3-27 CVP analysis, income taxes. The Home Style Eats has two restaurants that are open 24 hours aday. Fixed costs for the two restaurants together total $430,500 per year. Service varies from a cup of coffeeto full meals. The average sales check per customer is $8.75. The average cost of food and other variablecosts for each customer is $3.50. The income tax rate is 36%. Target net income is $117,600.1. Compute the revenues needed to earn the target net income.2. How many customers are needed to break even? To earn net income of $117,600?3. Compute net income if the number of customers is 170,000.
Problem 2 The manager of the Spartan Land Restaurant is developing the operating budget for next vear using the following financial information from the current year: Current Year's Next Year's Percentage Increase (Decrease) Next Year's Amount ($) Item Amount Food revenue 00$973,000 4% $112,500 2% Beverage revenue Food cost 000. 36% 1% Beverage cost Labor (including benefits) Other operating costs 23% d ate (1%) $298,000 (2%) 16% same Encar Fixed costs $70,000 same a. What is the current year's budgeted profit (loss)? b. Develop next year's budget: indicate the profit (loss).
MC Qu. 7-70 Santa Fe Production sells a single product to Santa Fe Production sells a single product to wholesalers. The company's budget for the upcoming year revealed anticipated unit sales of 36,400, a selling price of $28, variable cost per unit of $10, and total fixed costs of $384,000. If Santa Fe’s unit sales are 300 units less than anticipated, its break-even point will: Multiple Choice increase by $18 per unit sold. decrease by $18 per unit sold. increase by $10 per unit sold. decrease by $10 per unit sold. not change.
PA33-6 Preparing Operating Budgets for a Merchandising Firm Red Canyon T-shirt Company operates a chain of T-shirt shops in the southwestern United States. The sales manager has provided a sales forecast for the coming year, along with the following information: LO33-5 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Budgeted unit sales 40,000 60,000 30,000 60,000 Each T-shirt is expected to sell for $15. The purchasing manager buys the T-shirts for $6 each. The company needs to have enough T-shirts on hand at the end of each quarter to fill 25 percent of the next quarter's sales demand. • Selling and administrative expenses are budgeted at $80,000 per quarter plus 10 percent of total sales 0-6689 revenue. Required: Prepare the following operating budgets for quarters 1, 2, and 3. (You do not have enough information to complete quarter 4.) 1. Sales budget. 2. Merchandise purchases budget. 3. Cost of goods sold budget. 4. Selling and administrative expense budget. 5. Budgeted income statement.
t ces Exercise 6-5 (Algo) Compute the Margin of Safety [LO6-5] Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month's budget appear below: Selling price per unit Variable expense per unit Fixed expense per month Unit sales per month Required: 1. What is the company's margin of safety? $ 24 $ 16 $ 7,200 1,050 Note: Do not round intermediate calculations. 2. What is the company's margin of safety as a percentage of its sales? Note: Round your percentage answer to 2 decimal places (i.e. .1234 should be entered as 12.34). 1. Margin of safety (in dollars) 2. Margin of safety percentage %

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