Feather Friends, Incorporated, distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses are $40.00per unit, and fixed expenses total $160,000 per year. Its operating results for last year were as follows:SalesVariable expensesContribution marginFixed expensesNet operating income$ 1,920,000960,000960,000160,000$ 800,000Required: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 42,000 units and $3,360,000, respectively. If the fixed expenses do notchange, 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 11%. Using the degree of operating leverage from last year, whatpercentage increase in net operating income will the company realize this year?5. The sales manager is convinced a 11% reduction in the selling price, combined with a $75,000 increase in advertising, wouldincrease this year's unit sales by 25%.a. If the sales manager is right, what would be this year's net operating income if his ideas are implemented?b. If the sales manager's ideas are implemented, how much will net 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 $1.60 per unit. Hethinks this move, combined with some increase in advertising, would increase this year's unit sales by 25%. How much could thepresident increase this year's advertising expense and still earn the same $800,000 net operating income as last year?

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Answered: Feather Friends, Incorporated,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Feather Friends, Incorporated, distributes a high-quality wooden birdhouse that sells for $40 per unit. Variable expenses are $20.00 per unit, and fixed expenses total $200,000 per year. Its operating results for last year were as follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income $ 1,000,000 500,000 500,000 200,000 $ 300,000 Required: Answer each question independently based on the original data: 1. What is the product's CM ratio?
Your Company sells exercise bikes for $675 each. The following cost formula relates to last year's operations: Y = $135,000 + $157X. Your Company sold 520 bikes last year, what was its net income last year? Group of answer choices $134,360 $351,000 $269,360 $104,360 $ 81,640
Hd.31. Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $25 per unit. Variable expenses are $8 per unit, and fixed expenses total $160,000 per year. Its operating results for last year were as follows: Sales $ 350,000 Variable expenses 112,000 Contribution margin 238,000 Fixed expenses 160,000 Net operating income $ 78,000 Required: Answer each question independently based on the original data: 1. What is the products 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 percentage increase in the operating income will the…
Meargia Plastics is evaluating its plastic bottles division. The accounting manager has come up with the following data for the year: contribution margin of $570,000, controllable fixed of $228,000, and noncontrollable fixed costs of $57,000. Required: 1. What is the controllable margin? Controllable Margin 2. What is the total contribution by profit center (CPC)?
Feather Friends, Incorporated, distributes a high-quality wooden birdhouse that sells for $40 per unit. Variable expenses are $20.00 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows: Sales $ 1,080,000 Variable expenses 540,000 Contribution margin 540,000 Fixed expenses 180,000 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 51,000 units and $2,040,000, 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 11%. Using the degree of operating leverage from last year, what percentage increase in net operating…
Feather Friends, Inc distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses are $40 per unit and fixed expenses total 200000 per year. Its operating results for last year were as follows: Sales 2240000 Variable expenses 1120000 Contribution Margin 1120000 Fixed Expenses 200000 Net Operating income 920000 Answer this question independently based on the original data: Assume this year's unit sales and total sales increase by 54000 units and 4320000 respectively. If the fixed expenses do not change, how much will net operating income increase?
Bennington Health purchased three dialysis systems each at an installed cost of $100,000 for different locations in the city. The AOC over 2 years varied as shown. (All values are costs.) The load factor in terms of percentage of clients at each location is shown in decimal form. Find the expected AW of costs for each location at i = 15% per year. Location North South West Load 0.50 0.35 0.15 Year AOC Per Year 0 100,000 100,000 100,000 1 20,000 15,000 12,000 2 8,600 11,500 5,600
Hello, I'm just stuck on questions 5 and 6. Any help is appreciated thanks!
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?
3) Popular Inc. produces and sells two products. During the most recent month, Pen's sales were $24,000 and its variable expenses were $7,920. Pencil's sales were $41,000 and its variable expenses were $14,180. The company's fixed expenses were $40,350. Required: a. Prepare a contribution format income statement for the business. b. Determine the overall break-even point for the company in total sales dollars. c. Verify your answer of requirement b by constructing a contribution income statement.
Engberg Company installs lawn sod in home yards. The company’s most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 94,000 100% Variable expenses 37,600 40 Contribution margin 56,400 60% Fixed expenses 43,240 Net operating income $ 13,160 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 5% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 5% increase in unit sales.
Give me perfect answer with explanation.h

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