For the current year ending December 31, Rotisserie Industries expects fixed costs of $3,500,000 a unit variable cost of $12.50, and a unit selling price of $16.00. A) Compute the anticipated break-even sales (in units). B) Compute the sales (in units) required to realize income from operations of $500,003.

For the current year ending December 31, Rotisserie Industries expects fixed costs of $3,500,000 a unit variable cost of $12.50, and a unit selling price of $16.00. A) Compute the anticipated break-even sales (in units). B) Compute the sales (in units) required to realize income from operations of $500,003.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 36P: Faldo Company produces a single product. The projected income statement for the coming year, based...

See similar textbooks

Similar questions

Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?
Wellington, Inc., reports the following contribution margin income statement for the month of May. The company has the opportunity to purchase new machinery that will reduce its variable cost per unit by $10 but will increase fixed costs by 20%. Prepare a projected contribution margin income statement for Wellington, Inc., assuming it purchases the new equipment. Assume sales level remains unchanged.
Klamath Company produces a single product. The projected income statement for the coming year is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. 2. Suppose 10,000 units are sold above break-even. What is the operating income? 3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue. (Note: Round the contribution margin ratio to four decimal places, and round the sales revenue to the nearest dollar.) Suppose that revenues are 200,000 more than expected for the coming year. What would the total operating income be?
For the current year ended March 31, Cosgrove Company expects fixed costs of $579,000, a unit variable cost of $68, and a unit selling price of $89. a. Compute the anticipated break-even sales (units). b. Compute the sales (units) required to realize an operating income of $134,000. (Round your answer to nearest units)
For the current year ending April 30, MJW Company expects fixed costs of $87,500; a unit variable cost of $60; and a unit selling price of $95. (a) Compute the anticipated break-even sales (units). (b) Compute the sales (units) required to realize an operating profit of $8,000. (a) (b)
For the coming year, Bernardino Company anticipates a unit selling price of $85, a unit variable cost of $15, and fixed costs of $420,000. Compute the sales (units) required to realize operating income of $70,000.
For the coming year, Cleves Company anticipates a unit selling price of $80, a unit variable cost of $40, and fixed costs of $248,000. Required: 1. Compute the anticipated break-even sales (units). units 2. Compute the sales (units) required to realize a target profit of $96,000. units
For the current year ended March 31, Cosgrove Company expects fixed costs of $633,000, a unit variable cost of $62, and a unit selling price of $92. a. Compute the anticipated break-even sales (units). b. Compute the sales (units) required to realize operating income of $147,000.
Jellico Inc.’s projected operating income (based on sales of 450,000 units) for the coming year isas follows:TotalSales $11,700,000Total variable cost 8,190,000Contribution margin $ 3,510,000Total fixed cost 2,254,200Operating income $ 1,255,800Required:1. Compute: (a) variable cost per unit, (b) contribution margin per unit, (c) contribution margin ratio, (d) break-even point in units, and (e) break-even point in sales dollars.2. How many units must be sold to earn operating income of $296,400?3. Compute the additional operating income that Jellico would earn if sales were $50,000 morethan expected.4. For the projected level of sales, compute the margin of safety in units, and then in salesdollars.5. Compute the degree of operating leverage. (Note: Round answer to two decimal places.)6. Compute the new operating income if sales are 10% higher than expected.
For the coming year, Belton Company estimates fixed costs of $60,000, the unit variable cost of $25, and the unit selling price of $50. a. Determine the break-even point in units of sales.fill in the blank 1 units b. Determine the unit sales required to realize operating income of $100,000.fill in the blank 2 units c. Determine the probable operating income if sales total $400,000.$fill in the blank 3
Nombre Company management predicts $390,000 of variable costs, $430,000 of fixed costs, and a pretax income of $155,000 in the next period. Management also predicts that the contribution margin per unit will be $9. Use this information to compute the (1) total expected dollar sales for next period and (2) number of units expected to be sold next period.
For the coming year, River Company estimates fixed costs at $109,000, the unit variable cost at $21, and the unit selling price at $85. Determine the following: If required, round to the nearest whole unit and round interim calculations to one decimal place. Required: a. The break-even point in units of sales.fill in the blank 1 units b. The unit sales required to realize operating income of $150,000.fill in the blank 2 units c. The probable operating income if sales total $500,000.$fill in the blank 3