2. Refer to the income statements in Requirement (1) above. For both present operations and the proposed new operations, Compute:a. The degree of operating leverage.Degree of operating leverageb. The break-even point in dollars.Dollar sales to breakevenPresentMargin of safety in dollarsMargin of safety in percentagePresentProposedc. The margin of safety in both dollar and percentage terms.PresentProposed%Proposed%< Prev14 of 14 8:028Next > Frieden Company's contribution format income statement for the most recent month is given below:Sales (41,000 units)Variable expensesContribution marginFixed expensesNet operating income.$ 820,000574,000246,000196,800$ 49,200The industry in which Frieden Company operates is quite sensitive to cyclical movements in the economy. Thus, profits varyconsiderably from year to year according to general economic conditions. The company has a large amount of unused capacity and isstudying 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. Variableexpenses would be reduced by $6.00 per unit. However, fixed expenses would increase to a total of $442,800 each month. Preparetwo contribution format income statements: one showing present operations, and one showing how operations would appear if thenew equipment were purchased. (Input all amounts as positive values except losses which should be indicated by minus sign.Round your "Per unit" answers to 2 decimal places.)$Amount00PresentPer Unit$0.00Percentage%%0%$Amount00ProposedPer Unit$0.00Percentage%%0%

Name: 2. Refer to the income statements in Requirement (1) above. For both
Uploaded: 2024-03-20T06:33:06.000Z
Channel: Bartleby
Description: 2. Refer to the income statements in Requirement (1) above. For both present operations and the proposed new operations, Compute:a. The degree of operating leverage.Degree of operating leverageb. The break-even point in dollars.Dollar sales to break

Break-even point: The break-even point refers to a point where the total cost is equal to the total…

Business

Accounting

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 considerably from year to year according to general economic conditions. The company has a large amount of unused 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. V expenses would be reduced by $6.00 per unit. However, fixed expenses would increase to a total of $442,800 each mc two contribution format income statements: one showing present operations, and one showing how operations would a new equipment were purchased. (Input all amounts as positive values except losses which should be indicated by mi Round your "Per unit" answers to 2 decimal places.) Amount Present Per Unit Percentage Amount Proposed Per Unit Perc

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 considerably from year to year according to general economic conditions. The company has a large amount of unused 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. V expenses would be reduced by $6.00 per unit. However, fixed expenses would increase to a total of $442,800 each mc two contribution format income statements: one showing present operations, and one showing how operations would a new equipment were purchased. (Input all amounts as positive values except losses which should be indicated by mi Round your "Per unit" answers to 2 decimal places.) Amount Present Per Unit Percentage Amount Proposed Per Unit Perc

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Finny Inc's contribution format income statement for the most recent month is given below: Sales (58,000 units) Variable expenses Contribution margin Fixed expenses Net operating income $1,160,000 812,000 348,000 278,400 69,600 $ The industry in which Finny Inc. 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 Finny Inc. to automate a portion of its operations. Variable expenses would be reduced by $6 per unit. However, fixed expenses would increase to a total of $626,400 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. Amount Present Per Unit Percentage % CAR % % Amount Proposed Per Unit…
Sagar
Pharoah Corporation's Cajun Spice division has a segment margin is $434200 for the current reporting period. The division has an asset turnover of 3.1. Segment margin as a percentage of sales is 10%. What is the division's ROI? O 31% O 10% O 21% O The answer cannot be determined from the information given.
Chloe Enterprises operates a single-product entity. Data relating to the product for 2016 were as follows. Annual volume 32 000 units Selling price per unit $ 60 Variable manufacturing cost per unit 28 Annual fixed manufacturing costs 120 000 Variable marketing and distribution costs per unit 12 Annual fixed non-manufacturing costs 360 000 Required Calculate the break-even in both dollars and units for 2016 Calculate the margin of safety in both units and sales dollars Calculate the profit achieved in 2016 given the annual volume of 32 000 units Changes in marketing strategy are planned for 2017. This would increase variable marketing and distribution costs by $4 per unit, and reduce fixed non- manufacturing costs by $80 000 per year. Calculate the units that would need to be sold in 2017 to achieve the same profit as in 2016 Would you recommend the change? Explain.
Po.3.
The South Division of Wiig Company reported the following data for the current year. Sales Variable costs Controllable fixed costs Average operating assets 1. 2. 3. Top management is unhappy with the investment center's return on investment (ROI). It asks the manager of the South Division to submit plans to improve ROI in the next year. The manager believes it is feasible to consider the following independent courses of action. Return on Investment $2,950,000 1,947,000 Increase sales by $300,000 with no change in the contribution margin percentage. Reduce variable costs by $155,000. Reduce average operating assets by 4%. Action 1 595,000 (a) Compute the return on investment (ROI) for the current year. (Round ROI to 2 decimal places, e.g. 1.57%.) Action 2 5,000,000 Action 3 (b) Using the ROI formula, compute the ROI under each of the proposed courses of action. (Round ROI to 2 decimal places, e.g. 1.57%.) Return on investment do % % % %
A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Round your percentage answers to nearest whole percent and other amounts to whole dollars.) Sales Net operating income Average operating assets Return on investment (ROI) Minimum required rate of return: Percentage Dollar amount Residual income $ $ A 470,000 160,000 15 % 16 % $ $ $ Company B 680,000 43,000 19 % 57,000 % C $ 560,000 $ 145,000 $ % 10 % 5,000
Bramble Company reports the following operating results for the month of August: sales $300,000 (units 5,000); variable costs $217,000; and fixed costs $70,000. Management is considering the following independent courses of action to increase net income.Compute the net income to be earned under each alternative.1. Increase selling price by 10% with no change in total variable costs or sales volume. Net income $enter a net income if the selling price is increased by 10% 2. Reduce variable costs to 55% of sales. Net income $enter a net income if the variable costs are reduced to 55% of sales 3. Reduce fixed costs by $18,000. Net income $enter a net income if the fixed costs are reduced by $18,000
2. Assume that the company expects sales of each product to decline to 41,000 units next year with no change in unit selling price. Prepare a contribution margin income statement for the next year (as shown above with columns for each of the two products). Note: Round "per unit" answers to 2 decimal places. Contribution margin Income (loss) HENNA COMPANY Contribution Margin Income Statement Carvings Mementos Units Total $ Per unit Total $ Per unit Total
Vinubhai
Les Objets Volants (LOJ), S.A., of France, makes aircraft equipment. The company has been experiencing losses on its fuel pump product line for several years. The most recent quarterly income statement for the fuel pump product line follows: Sales Less: Variable expenses: LES OBJETS VOLANTS S.A. Income Statement-Fuel Pump For the Quarter Ended March 31 Variable manufacturing expenses Sales commissions Shipping Total variable expenses Contribution margin Less: Fixed expenses: Advertising Depreciation of equipment (no resale value) General factory overhead Salary of product-line manager Insurance on inventories Purchasing department expenses Total fixed expenses Net operating loss *Common costs allocated on the basis of machine-hours. *common costs allocated on the basis of sales dollars. Net advantage (disadvantage) of dropping the line € 320,000 66,000 14,000 Should the fuel pump product line be discontinued? 290,000 90.000 149,000* 38,000 18,000 65,000+ € 1,000,000 € 400,000 600,000…