Henderson Farms reports the following results for the month of November:$600,000Sales (10,000 units)420,000Variable costsContribution margin180,000110,000Fixed costs$ 70,000Net incomeManagement is considering the following independent courses of action to increase net income.Increase selling price by 5% with no change in total variable1.costs.2. Reduce variable costs to 66 % of sales.3. Reduce fixed costs by $10,000.Calculate net income for the above courses of action.CourseNet Income1. Increase selling price $2. Reduce variable cost $3. Reduce fixed cost$

Calculation of net income: Increase selling price: Results of the formulas used in the Excel table…

Answered: Henderson Farms reports the following…

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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Whirly Corporation's contribution format income statement for the most recent month is shown below: Total Per Unit Sales (7,700 units) $ 246, 400 $ 32.00 Variable expenses 138, 600 18.00 Contribution margin 107,800 $ 14.00 Fixed expenses 54, 500 Net operating income $ 53,300 Required: (Consider each case independently): What would be the revised net operating income per month if the sales volume increases by 60 units? What would be the revised net operating income per month if the sales volume decreases by 60 units? What would be the revised net operating income per month if the sales volume is 6, 700 units?
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Maestro Co. employs a salesperson whose salary is $2,000 per month. Once the monthly sales exceed $40,000, the salesperson receives the commission of 5% of the sales made. Which of the following Cost Behavior Patterns describe the salesperson’s salary the most? Question 7Select one: a. Variable costs b. Fixed costs c. Semivariable costs d. Step costs
Sunn Company manufactures a single product that sells for $120 per unit and whose variable costs are $90 per unit. The company's annual fixed costs are $432.000 Management targets an annual income of $750,000. (1) Compute the unit sales to earn the target income. Numerator: 1 Denominator: (2) Compute the dollar sales to earn the target income.. Numerator: Denominator P M = Units to Achieve Target Units to achieve target Dollars to Achieve Target Dollars to achieve target
Mukh
Dominic's Deli recently calculated its annual break-even sales revenue to be $280,000. For each dollar of sales revenue, $0.40 goes to cover variable costs. a. Compute the contribution margin ratio. b. Compute the total fixed costs. c. Compute the sales revenue that would have to be generated to earn an operating income of $144,000. a. Contribution margin ratio b. Total fixed costs c. Sales revenue 60 %
Drake Company produces a single product. Last year's income statement is as follows: Sales (21,000 units) $1,278,900 Less: Variable costs 879,900 Contribution margin $399,000 Less: Fixed costs 259,800 Operating income $139,200 Required: Question Content Area 1. Compute the break-even point in units and sales revenue. In your computations, round the contribution margin per unit to the nearest cent and round the contribution margin ratio to four decimal places. Round your final answers to the nearest whole unit or dollar. Break-even units units Break-even dollars 2. What was the margin of safety in dollars for Drake Company last year? Round your final answer to the nearest whole dollar.
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Spruce Enterprises anticipates fixed costs of $25,000. Variable costs and expenses are expected to be 60% of sales. The president has asked you to develop a worksheet to calculate sales needed to break even and sales needed to achieve any desired net income (file name DESNI). Your worksheet should include a Data Section that contains fixed costs, desired net income, and variable costs as a percentage of sales. Assume as initial input for your model that the company wishes to achieve a net income of $10,000.
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