Frieden Company's contribution format income statement for last month is shown below:Sales (30,000 units)Variable expensesContribution marginFixed expensesOperating income$1,200,000720,000480,000384,000$ 96,000Competition is intense, and Frieden Company's profits vary considerably from one year to the next. Management is exploringopportunities to increase profitability.Required:1. Frieden's management is considering a major upgrade to the manufacturing equipment, which would result in fixed expensesincreasing by $480,000 per month. However, variable expenses would decrease by $16 per unit. Selling price would not change.Prepare two contribution format income statements, one showing current operations and one showing how operations would appear ifthe upgrade is completed. Show an Amount column, a Per Unit column, and a Percentage column on each statement.$FRIEDEN COMPANYContribution Margin Income StatementPresentAmount0 $0Per Unit0%0$AmountProposedPer Unit0 $00%0

Lets understand the basics.Contribution margin income statement is a statement which shows…

Answered: Frieden Company's contribution format…

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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The following information is for Gable, Inc. and Harlowe, Inc. for the recent year. Harlowe, Inc. $800,000 200,000 600,000 400,000 $200,000 Sales Variable costs. Contribution margin Fixed costs Income from operations Gable, Inc. $800,000 400,000 400,000 200,000 $200,000 What total amount of net income will Harlowe, Inc. earn if it experiences a 10 percent increase in revenue?
Vulcan Company's contribution format income statement for June is es follows: Vulcan Company Income Statenent For the Month Ended June 30 Sales Variable expenses Contribution margin Fixed expenses $ 9e0, e00 488, 00e 492, 800 455,000 Net operating income $ 37,000 Management is disoppointed with the company's performance and is wondering what con be done to improve profits. By examining soles and cost records, you have determined the following: a. The company is divided into two sales territories-Northern and Southern. The Northern Territory recorded $400,000 in sales and $168,000 in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory. Fixed expenses of $204,000 and $120,000 are traceable to the Northern and Southern Territories, respectively. The rest of the fixed expenses are common to the two territories. b. The company is the exclusive distributor for two products-Paks and Tibs. Sales of Paks and Tibs totaled $210,000 and…
EXERCISE: Computing and Using the CM Ratio,Last month when Holiday Creations, Inc., sold 50,000 units, total sales were $200,000, total variable expenses were $120,000, and fixed expenses were $65,000.Required:1. What is the company’s contribution margin (CM) ratio?2. Estimate the change in the company’s net operating income if it were to
Tyler Company has the following information pertaining to its two product lines for last year: Variable selling and admin. expenses Direct fixed expenses Sales Direct fixed selling and admin. expenses Variable expenses Operating income Common expenses are $105,000 for the year. What is the income for Tyler Company? $102,500 $120,500 $99,000 $101,000 Product A $38,000 19,500 250,000 38,000 42,000 $112,500 " Product B $31,000 34,500 210,000 22,000 31,000 $91,500
Vulcan Company's contribution format income statement for June is as follows: Vulcan Company Income Statement For the Month Ended June 30 Sales Variable expenses Contribution margin Fixed expenses Net operating income $ Management is disappointed with the company's performance and is wondering what can be done to improve profits. By examining sales and cost records, you have determined the following: 800,000 300,000 500,000 475,000 $ 25,000 a. The company is divided into two sales territories-Northern and Southern. The Northern Territory recorded $400,000 in sales and $220,000 in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory. Fixed expenses of $156,000 and $100,000 are traceable to the Northern and Southern Territories, respectively. The rest of the fixed expenses are common to the two territories. b. The company is the exclusive distributor for two products-Paks and Tibs. Sales of Paks and Tibs totaled $100,000 and…
請 RequIred Informatlon (The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations: $ 2,300,00e Sales Variable expenses Contribution margin Fixed expenses 000 1,630,000 Net operating income Average operating assets $ 1,437,500 At the beginning of this year, the company has a $287,500 investment opportunity with the following cost and revenue characteristics: Sales Contribution margin ratio Fixed expenses. 000 50% of sales $161,000 The company's minimum required rate of return is 15%. 11. What is last year's residual income? Residual income, < Prev 11 12 13 of 15 Nex to search 近
A company sells one product and its contribution margin ratio is 20%. The company provides the following data regarding their operation: Current sales revenue Expected sales revenue next year Expected increase in net operating income next year $2,760,000 $2,870,400 20% Assuming that there is no change in total fixed expenses, what is the net operating income for the current year? Answer: $(Click to select)
Whirly Corporation's contribution format income statement for the most recent month is shown be Total $ 254, 200 147,600 Per Unit Sales (8,200 units) Variable expenses $ 31.00 18.00 Contribution margin 106,600 $ 13.00 Fixed expenses 54,200 Net operating income $ 52,400 Required: (Consider each case independently): 1. What would be the revised 2. What would be the revised net operating income per month if the sales volume decreases by 60 units? 3. What would be the revised net operating income per month if the sales volume is 7,200 units? operating income per month if the sales volume increases by 60 units? 1. Revised net operating income 2. Revised net operating income 3. Revised net operating income Pr [O ere to search
Vulcan Company's contribution format income statement for June is as follows: Vulcan Company Income Statement For the Month Ended June 30 Sales Variable expenses Contribution margin Fixed expenses ३900, 000 400,000 500,000 475,000 $ 25,000 Net operating income Management is disappointed with the company's performance and is wondering what can be done to improve profits. By examining sales and cost records, you have determined the following: a. The company is divided into two sales territories-Northern and Southern. The Northern Territory recorded $400,000 in sales and $160,000 in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory. Fixed expenses of $176,000 and $140,000 are traceable to the Northern and Southern Territories, respectively. The rest of the fixed expenses are common to the two territories. b. The company is the exclusive distributor for two products-Paks and Tibs. Sales of Paks and Tibs totaled $140,000 and…
Frieden Company's contribution format income statement for the most recent month is given below: Sales (41,000 units) Variable expenses Contribution margin Fixed expenses Net operating income. $ 820,000 574,000 246,000 196,800 $ 49,200 The industry in which Frieden Company operates is quite sensitive to cyclical movements in the economy. Thus, profits vary considerably from year to year according to general economic conditions. The company has a large amount of unused capacity and is studying ways of improving profits. Required: 1. New equipment has come on the market that would allow Frieden Company to automate a pation of its operations. Variable expenses would be reduced by $6.00 per unit. However, fixed expenses would increase to a total of $442,800 each month. Prepare two contribution format income statements: one showing present operations, and one showing how operations would appear if the new equipment were purchased. (Input all amounts as positive values except losses which…
Vulcan Company's contribution format income statement for June is as follows: Vulcan Company Income Statement For the Month Ended June 30 Sales Variable expenses Contribution margin Fixed expenses Net operating income $ 800,000 308,000 492,000 455,000 $ 37,000. Management is disappointed with the company's performance and is wondering what can be done to improve profits. By examining sales and cost records, you have determined the following: a. The company is divided into two sales territories-Northern and Southern. The Northern Territory recorded $400,000 in sales and $248,000 in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory. Fixed expenses of $140,000 and $84,000 are traceable to the Northern and Southern Territories, respectively. The rest of the fixed expenses are common to the two territories. b. The company is the exclusive distributor for two products-Paks and Tibs. Sales of Paks and Tibs totaled $110,000 and…
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