Feather Friends, Incorporated, distributes a high-quality wooden birdhouse that sells for $20 per unit. Variable expenses are $10 perunit, and fixed expenses total $190,000 per year. Its operating results for last year were as follows:Sales (23,000 units)Variable expensesContribution marginFixed expensesOperating incomeRequired:Answer each question Independently based on the original data:1. What is the product's CM ratio?2. Use the CM ratio to determine the break-even point in sales dollars.3. Assume this year's total sales increase by $40,000. If the fixed expenses do not change, how much will operating Income Increase?Assume that the operating results for last year were as in the question data.4-a. Compute the degree of operating leverage based on last year's sales.4-b. The president expects sales to increase by 16% next year. Using the degree of operating leverage from last year, what percentageIncrease in operating Income will the company realize this year? Calculate the dollar Increase in operating Income.5. The sales manager is convinced that a 12% reduction in the selling price, combined with a $32,000 increase in advertising, wouldIncrease this year's unit sales by 30%.$ 460,000230,000230,000190,00040,000a. If the sales manager is right, what would be this year's operating Income If his Ideas are implemented?b. If the sales manager's Ideas are implemented, how much will operating Income increase or decrease over last year?$6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $1 per unit. Hethinks that this move, combined with some increase in advertising, would increase this year's unit sales by 30% How much could thepresident increase this year's advertising expense and still earn the same $40,000 operating income as last year?Req 1Complete this question by entering your answers in the tabs below.Reg 2What is the product's CM ratio?CM ratio%6Req 3Req 4AReg 1Req 4BReq 5AReq 2 >Req 5BReq 6

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Answered: Feather Friends, Incorporated,…

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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ABC Service company provides shuttle service between four hotels near a Hospital and an intermational airport. ABC uses two 10- passenger vans to offer 12 round trips per day. A recent month's activity in the form of a cost-volume-profit income statement is shown below. Fare revenues (1,440 fares/units) OMR 36,000 Variable costs Fuel OMR 5,040 Tolls and parking 3,100 Maintenance 860 9,000 Contribution margin 27,000 Fixed costs Salaries 12,700 1,300 Depreciation 1,000 Insurance 15,000 OMR 12,000 Net income What is the break-even point in OMR/ dollars?
Current operating income for Bay Area Cycles Company is $26,000. Selling price per unit is $100, the contribution margin ratio is 25%, and fixed expense is $104,000. Required: 1. Calculate Bay Area Cycle's per unit variable expense and contribution margin. How many units are currently being sold? 2. How many additional unit sales would be necessary to achieve operating income of $65,000? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate Bay Area Cycle's per unit variable expense and contribution margin. How many units are currently being sold? Revenue Variable expense Contribution margin Fixed expense Operating income $ Per Unit 100.00 Volume
Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income Amount $ 88,000 35,200 52,800 41,360 $ 11,440. Percent of Sales 100% 40% 60% Required: 1. What is the company's degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 6% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales.
Use the following information for the Quick Study below. (Algo) Skip to question [The following information applies to the questions displayed below.] Aces Incorporated, a manufacturer of tennis rackets, began operations this year. The company produced 7,350 rackets and sold 5, 580. Each racket was sold at a price of $90. Fixed overhead costs are $95, 550 per year, and fixed selling and administrative costs are $ 68,000 per year. The company also reports the following per unit variable costs for the year. Direct materials $ 12 Direct labor 8 Variable overhead 5 Variable selling and administrative expenses 2 QS 19-7 (Algo) Reporting inventory using absorption costing LO P2 Compute the cost of ending finished goods inventory reported on the balance sheet using absorption costing.
compute the following questions (1 to 5) Don't forget to show your complete solution
Give me perfect answer with explanation.h
Wild-Water Works Water Park provides for a fun day by offering a variety of rides. Wild-Water Works Water Park sells tickets at $69 per person as a one-day entrance fee. Variable costs per person are $24 and a fixed cost amount to $236,300 per month. (Round your answers to two decimal places when needed and use rounded answers for all future calculations). 1. Compute the new contribution margin per unit and the contribution margin ratio if Wild-Water Works Water Park cuts it ticket price to $40 per person. Net Sales revenue per unit Contribution margin / Net sales revenue = Contribution margin ratio (%) (Fixed Costs 2. Find the break-even point in units and in dollars using the contribution margin approach. (Reminder to write answer in whole units). + Variable costs per unit = Unit Contribution margin (Fixed Costs + Target Profit) / (Contribution Margin per unit) + + Target Profit) 1 = = 1 / (Contribution Margin ratio %) = = Required Sales in Units Required Sales in Dollars
Sandy Bank, Incorporated, makes one model of wooden canoe. Partial information is given below. Required: 1. Complete the following table. 2. Suppose Sandy Bank sells its canoes for $560 each. Calculate the contribution margin per canoe and the contribution margin ratio. 3. This year Sandy Bank expects to sell 760 canoes for $560 each. Prepare a contribution margin income statement for the company. 4. Calculate Sandy Bank's break-even point in units and in sales dollars. Sandy Bank sells its canoes for $560 each. 5. Suppose Sandy Bank wants to earn $72,000 profit this year. Calculate the number of canoes that must be sold to achieve this target. Sandy Bank sells its canoes for $560 each. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the following table. Note: Round your "Cost per Unit" answers to 2 decimal places. Number of Canoes Produced and Sold Total costs Variable Costs Fixed Costs Total Costs Cost per Unit Required 3 Required 4…
Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $40 per unit. Variable expenses are $20.00 per unit, and fixed expenses total $160,000 per year. Its operating results for last year were as follows: Sales Variable expenses Contribution margin Fixed expenses $ 1,040,000 520,000 520,000 160,000 Net operating income 360,000 Required: Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in dollar sales. 3. Assume this year's unit sales and total sales increase by 48,000 units and $1,920,000, respectively. If the fixed expenses do not change, how much will net operating income increase? 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's unit sales to increase by 14%. Using the degree of operating leverage from last year, what percentage increase in net operating income will the company realize…
Sandy Bank, Inc., makes one model of wooden canoe. Partial information is given below. Required: 1. Complete the following table. 2. Suppose Sandy Bank sells its canoes for $580 each. Calculate the contribution margin per canoe and the contribution margin ratio. 3. This year Sandy Bank expects to sell 800 canoes. Prepare a contribution margin income statement for the company. 4. Calculate Sandy Bank's break-even point in units and in sales dollars. 5. Suppose Sandy Bank wants to earn $66,000 profit this year. Calculate the number of canoes that must be sold to achieve this target. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Complete the following table. (Round your "Cost per Unit" answers to 2 decimal places.) Number of Canoes Produced and Sold 610 Total costs Variable Costs Fixed Costs Total Costs Cost per Unit Variable Cost per Unit Fixed Cost per Unit Total Cost per Unit $ $ $ 410 Required 1 59,450 139,400…
Hi, Please help me answer the remaining parts of Requirements 1 through 3. Thank you.
Cullumber provides shuttle service between 4 hotels near a medical center and an international airport. Cullumber uses two 10- passenger vans to offer 12 round trips per day. A recent month's activity in the form of a cost-volume-profit income statement is as follows. Sales (1,370 passengers) Variable costs Fuel Tolls and parking Maintenance Contribution margin Fixed costs Salaries Depreciation (straight-line) Insurance Net income Break-even point Break-even point $3,836 $ 2,359 655 12,300 1,100 1,000 $34,250 6,850 Calculate the break-even point in (1) sales dollars and (2) number of passengers. 27,400 14,400 $13,000 passengers

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