Exercise 23-13 (Algo) Special offer pricing LO P7Farrow Company reports the following annual results.Contribution Margin Income StatementSales (420,000 units)Variable costsDirect materialsDirect laborOverheadContribution marginFixed costsFixed overheadFixed general and administrativeIncomePer Unit$15.002.004.002.506.502.001.50$ 3.00(a) Compute the income or loss for the special offer.(b) Should the company accept or reject the special offer?Annual Total$ 6,300,000840,0001,680,0001,050,0002,730,000840,000630,000$ 1,260,000The company receives a special offer for 42,000 units at $12 per unit. The additional sales would not affect its normal sales. Variablecosts per unit would be the same for the special offer as they are for the normal units. The special offer would require incrementalfixed overhead of $168,000 and incremental fixed general and administrative costs of $181,000.Complete this question by entering your answers in the tabs below.

Analysis of special offers is an essential component of marketing and sales strategy since it offers…

Exercise 23-13 (Algo) Special offer pricing LO P7 Farrow Company reports the following annual results. Contribution Margin Income statement Sales (420,000 units) Variable costs Direct materials Direct labor Overhead Contribution margin Fixed costs Fixed overhead Fixed general and administrative Income Per Unit $ 15.00 2.00 4.00 2.50 6.50 2.00 1.50 $ 3.00 Annual Total $ 6,300,000 840,000 1,680,000 1,050,000 2,730,000 840,000 630,000 $ 1,260,000

Exercise 23-13 (Algo) Special offer pricing LO P7 Farrow Company reports the following annual results. Contribution Margin Income statement Sales (420,000 units) Variable costs Direct materials Direct labor Overhead Contribution margin Fixed costs Fixed overhead Fixed general and administrative Income Per Unit $ 15.00 2.00 4.00 2.50 6.50 2.00 1.50 $ 3.00 Annual Total $ 6,300,000 840,000 1,680,000 1,050,000 2,730,000 840,000 630,000 $ 1,260,000

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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Exercise 18-8 (Algo) Computing missing amounts in contribution margin Income statements LO A1 Compute the missing amounts in the contribution income statement shown below: (Round "Per Unit" answers to 2 decimal places.) Company A Company B Number of units sold Sales Variable costs Contribution margin Fixed costs Income 2,375 Total $ 465,000 $ 97.00 Per unit Total Per unit 302,400 123,500 166,250 $ 108,000 61,750
Required information [The following information applies to the questions displayed below.] Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales (11,200 units at $280 each) Variable costs (11,200 units at $210 each) Contribution margin Fixed costs Income $ 3,136,000 2,352,000 784,000 567,000 $ 217,000 1. Compute break-even point in units. 2. Compute break-even point in sales dollars. 1. Break-even units 2. Break-even sales dollars units
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United Merchants company sells 32000 units at $31 per unit the variable cost I 2449 per unit and fixed cost at 112500 determine the contribution margin ratio view unit contribution margin and the income from operations
Problem 12-21 (Algo) Prepare a contribution margin format income statement; answer what-if questions LO 12-7, 12-8, 12-9 Shown here is an income statement in the traditional format for a firm with a sales volume of 7,500 units. Cost formulas also are shown: Revenues Cost of goods sold ($5,900 + $2.25/unit) Gross profit Operating expenses: Selling ($1,200 + $0.10/unit) Administrative ($3,500 + $0.20/unit) Operating income $34,400 22,775 $ 11,625 1,950 5,000 $ 4,675 Required: a. Prepare an income statement in the contribution margin format. b. Calculate the contribution margin per unit and the contribution margin ratio. c. Calculate the firm's operating income (or loss) if the volume changed from 7,500 units to 1. 11,250 units. 2. 3,750 units. d. Refer to your answer to part a for total revenues of $34,400. Calculate the firm's operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues 1. Increase by $14,500. 2. Decrease by $3,000.
Exercise 19-7 (Algo) Income reporting under absorption costing and variable costing LO P2 Sims Company began operations on January 1. Its cost and sales information for this year follow. Direct materials $ 40 per unit Direct labor $ 60 per unit Variable overhead $ 40 per unit Fixed overhead $ 6,300,000 per year Variable selling and administrative expenses $ 11 per unit Fixed selling and administrative expenses $ 5,000,000 per year Units produced 105,000 units Units sold 75,000 units Sales price $ 350 per unit 1. Prepare an income statement for the year using variable costing.2. Prepare an income statement for the year using absorption costing.
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Exercise 18-13 (Algo) Computing sales to achieve target income LO C2 Sunn Company manufactures a single product that sells for $145 per unit and whose variable costs are $87 per unit. The company's annual fixed costs are $916,400. Management targets an annual income of $1,450,000. (1) Compute the unit sales to earn the target income. Numerator: 1 1 Denominator: (2) Compute the dollar sales to earn the target income. Numerator: 1 1 Denominator: = || = = || Units to Achieve Target Units to achieve target 0 Dollars to Achieve Target Dollars to achieve target 0
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
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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