Required information[The following information applies to the questions displayed below.]Hudson Company reports the following contribution margin income statement.HUDSON COMPANYContribution Margin Income StatementFor Year Ended December 31Sales (11,500 units at $225 each)Variable costs (11,500 units at $180 each)Contribution marginFixed costsIncome$ 2,587,5002,070,000517,500360,000$ 157,500The company is considering buying a new machine that will increase its fixed costs by $36,000 per year and decrease its variablecosts by $10 per unit. Prepare a contribution margin income statement for the next year assuming the company purchases thismachine.HUDSON COMPANYContribution Margin Income StatementFor Year Ended December 31SalesVariable costsContribution marginFixed costsIncome0$0

The contribution margin is the difference between the sales and the variable cost , Thus in other…

Answered: Hudson Company 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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Flying Cloud Co. has the following operating data for its manufacturing operations: Unit selling price $239 Unit variable cost $108 Total fixed costs $842,000 The company has decided to increase the wages of hourly workers which will increase the unit variable cost by 10%. Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 4%. If sales prices are held constant, the next break-even point for Flying Cloud Co. will be Oa. increased by 858 units Ob, decreased by 858 units Oc. increased by 686 units Od. increased by 1,029 units
Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 70 49 $ 21 Fixed expenses are $74,000 per month and the company is selling 4,400 units per month. Req 2A 2-a. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $4 per unit and increase unit sales by 25%. 2-b. Should the higher-quality components be used? Req 2B Percent of Sales Complete this question by entering your answers in the tabs below. 100% 70 30% by Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher- quality components that increase the variable expense by $4 per unit and increase unit sales by 25%. Net operating income
Concord Corporation recorded operating data for its auto accessories division for the year. Sales Contribution margin Total direct fixed costs Average total operating assets $750000 12.0% 38.0% 56.0% 32.0% 250000 90000 500000 How much is ROI for the year if management is able to identify a way to improve the contribution margin by $30000, assuming fixed costs are held constant?
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Your Company is considering the addition of a new product to its current product lines. The expected cost and revenue data for the new product are as follows: Annual sales in units 3,000 Selling price per unit $309 Variable costs per unit: Production $130 Selling $50 Traceable annual fixed costs: Production $51,000 Selling $75,000 Allocated annual fixed cost $54,000 If the new product is added to the existing product line, then sales of existing products will decline. As a consequence, the contribution margin of the existing product lines is expected to drop $78,000 per year. What is the increase in net income if the new product is added next year? This is a reverse drop the segment. New CM is positive and new FC and lost CM are negative.
A company wants to expand by offering a new product. Expected cost and revenue data for this product are: Annual sales 5,000 units Unit selling price ? Unit variable costs: Production $ 30.20 Selling 6. Incremental fixed costs per year: 32:16 Production $35,000 Selling $45,000 If the company adds this new product, sales of its other product lines will be impacted, causing the contribution margin of other product lines to drop by $18,500 per year. What is the lowest price the company could charge for its new product without affecting the company's total profits? Multiple Choice $39.90 $52.20
Cabin Creek Company is considering adding a new line of kitchen cabinets. The company's accountant provided the following estimated data for these cabinets: Annual sales Selling price per unit Variable manufacturing costs per unit Variable selling costs per unit Incremental fixed costs per year: 800 units. $ 3,680 $ 1,680 $ 530 $ 493,400 Manufacturing Selling Allocated common costs per year: Manufacturing Selling and administrative $ 73,000 $ 98,000 $ 130,000 If the kitchen cabinets are added as a new product line, the company expects that the contribution margin earned from selling products will decrease by $236,000 per year. Required: 1. What is the annual financial advantage (disadvantage) of adding the new line of kitchen cabinets? 2. What is the lowest selling price per unit that could be charged for the cabinets and still make it economically desirable for th company to add the new product line? Complete this question by entering your answers in the tabs below. Required 1…
Nocum Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. Sales (3,000 units) Variable expenses Contribution margin Fixed expenses $ 120,000 90,000 30,000 21,000 $ 9,000 Net operating income If sales volumes decline to 2,900 units, the net operating income would be closest to:

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