he Northern Co. manufactures office chairs. The following information is available for June: Line Item Description Amount Selling price per chair $150 Variable cost per chair 80 Total fixed costs 103,000 If the company sells 1,500 chairs in the month of June, the margin of safety in units is _____. (Round-off the answer to the nearest whole number.) a. 0 chairs b. 29 chairs c. 10 chairs d. 20 chairs

he Northern Co. manufactures office chairs. The following information is available for June: Line Item Description Amount Selling price per chair $150 Variable cost per chair 80 Total fixed costs 103,000 If the company sells 1,500 chairs in the month of June, the margin of safety in units is _____. (Round-off the answer to the nearest whole number.) a. 0 chairs b. 29 chairs c. 10 chairs d. 20 chairs

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 2PA: A company manufactures and sells racing bicycles to specialty retailers. The Bomber model sells for...

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A company manufactures and sells racing bicycles to specialty retailers. The Bomber model sells for $450 and has per-unit variable costs of $200 associated with its production. The company has fixed expenses of $40,000 per month. In May, the company sold 225 of the Bomber model bikes. A. Calculate the contribution margin per unit for the Bomber. B. Calculate the contribution margin ratio of the Bomber. C. Prepare a contribution margin income statement for the month of May.
A company sells small motors as a component part to automobiles. The Model 101 motor sells for $850 and has per-unit variable costs of $400 associated with its production. The company has fixed expenses of $90,000 per month. In August, the company sold 425 of the Model 101 motors. A. Calculate the contribution margin per unit for the Model 101. B. Calculate the contribution margin ratio of the Model 101. C. Prepare a contribution margin income statement for the month of August.
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Good afternoon Please answer d i,ii Scent Fragrance Company manufactures and sells several ranges of perfumes. The Average revenue and cost of sales are as follows: Selling price per unit $20.00 Variable costs per unit: Direct materials $4.00 Direct manufacturing labor $1.60 Manufacturing overhead $0.40 Selling costs $2.00 Annual fixed costs $96,000 a) Calculate the contribution margin per unit. b) Calculate the number of units Scent Fragrance Company must sell each year to break even. c) Calculate the number of units Scent Fragrance Company must sell to yield a profit of$144,000. d) Managers may use Sensitivity analysis in their accounting system. i) What is sensitivity analysis? ii) How is Sensitivity analysis useful to managers?
Johnson Stores produce and sell face powder called the 'Success' in cases. Each case is sold for $80. The following information relates to the product in the autumn and summer of 2020: Sales Production Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expenses Variable selling expenses Variable administrative expenses are 10% of sales value Fixed administrative expenses are 25% of sales value Autumn 23,400 units 28,500 units $136,800 $133,950 $71,250 $120,000 $25,500 $42,750 Summer 35,700 units 30,600 units $146,880 $143,820 $76,500 $122,000 $25,500 $45,900 Normal capacity for the year was 117,600 cases to be produced evenly throughout the year with a budgeted cost of $470,400. Assume that there will be no inventory held on January 1, 2020. Required: (1) Prepare profit statement for each of the two quarters using absorption and variable costing techniques. (2) Compute and reconcile the differences in the operating incomes of both…
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