Hudson Company reports the following contributionmargin income statement.HUDSON COMPANYContribution Margin Income Statement for Year EndedDecember 31Sales (9,600 units at $225 each) $2,160,000Variable costs (9,600 units at $180 each) 1,728,000Contribution margin 432,000Fixed costs 324,000Income $108,000The marketing manager believes that increasingadvertising costs by $81,000 will increase the company'ssales volume to 11,000 units. Prepare a contributionmargin income statement for the next year assuming thecompany incurs the additional advertising costs.HUDSON COMPANYContribution Margin Income StatementFor Year Ended December 31SalesVariable costsContribution marginFixed costsIncome/Loss0

The contribution margin is calculated as the difference between sales and variable costs. The net…

Answered: Hudson Company reports the following…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Problem 1Q

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Ajay
Blossom Farms reports the following results for the month of November: Sales ( 11,000 units) $ 660,000 Variable costs 462,000 Contribution margin 198,000 Fixed costs 121,000 Net income $ 77,000 Management is considering the following independent courses of action to increase net income. 1. Increase selling price by 5% with no change in total variable costs. 2. Reduce variable costs to 66 ²/³% of sales. 3. Reduce fixed costs by $ 10,000. Calculate net income for the above courses of action. Calculate net income for the above courses of action. Course Net Income 1. Increase selling price $ enter a dollar amount 2. Reduce variable cost $ enter a dollar amount 3. Reduce fixed cost $ enter a dollar amount If maximizing net income is the objective, which is the best course of action? Best course of action is ______________
Chovanec Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Selling price $ 170 100% Variable expenses 68 40% Contribution margin $ 102 60% Fixed expenses are $521,000 per month. The company is currently selling 7,000 units per month. Management is considering using a new component that would increase the unit variable cost by $6. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 500 units. What should be the overall effect on the company's monthly net operating income of this change? Multiple Choice increase of $6,000 decrease of $6,000 decrease of $48,000 increase of $48,000
a. Yountz Company budgets sales of $1,130,000, fixed costs of $68,600, and variable costs of $305,100. What is the contribution margin ratio for Yountz Company? (Enter your answer as a whole number.)fill in the blank 1 % b. If the contribution margin ratio for Vera Company is 38%, sales were $809,000, and fixed costs were $224,420, what was the income from operations?$fill in the blank 2
sanju
Milden Company is a distributor who wants to start using a contribution format income statement for planning purposes. The company has analyzed its expenses and developed the following cost formulas: Cost Cost Formula Cost of good sold $31 per unit sold Advertising expense $187,000 per quarter Sales commissions 7% of sales Shipping expense? Administrative salaries $97,000 per quarter Insurance expense $10,700 per quarter Depreciation expense $67,000 per quarter Because shipping expense is a mixed cost, the company needs to estimate the variable shipping expense per unit sold and the fixed shipping expense per quarter using the following data: Shipping Expense Year 1: First 33,000 $177,000 Second 35,000 $ 192,000 Third 40,000 $234,000 Fourth 36,000 $ 197,000 Year 2: First 34,000 $ 187,000 Second 37,000 $ 202,000 Third 48,750 $ 240,000 Fourth 45,750 $ 216,000 Required: 1. Using the high- low method, estimate a cost formula for shipping expense in the form Y = a + bX. 2. In the first…
Houpe Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Selling price $ 140 100% Variable expenses 42 30% Contribution margin $ 98 70% Fixed expenses are $490,000 per month. The company is currently selling 6,000 units per month. The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $11 per unit. In exchange, the sales staff would accept a decrease in their salaries of $58,000 per month. (This is the company's savings for the entire sales staff.) The marketing manager predicts that introducing this sales incentive would increase monthly sales by 100 units. What should be the overall effect on the company's monthly net operating income of this change?
a. Young Company budgets sales of $960,000, fixed costs of $34,600, and variable costs of $153,600. What is the contribution margin ratio for Young Company? b. If the contribution margin ratio for Martinez Company is 61%, sales were $559,000, and fixed costs were $248,920, what was the operating income?
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Kuzio Corporation produces and sells a single product. Data concerning that product appear below. Selling price Variable expenses Percent of Per Unit $ 130 78 $ 52 Sales 100% 60% 40% Contribution margin The company is currently selling 6,000 units per month. Fixed expenses are $263,000 per month. The marketing manager belleves that a $5,000 Increase in the monthly advertising budget would result in a 140 unit increase in monthly sales volume. What should be the overall effect on the company's monthly net operating Income of this change? Multiple Choice Increase of $7,280 decrease of $2,280 Increase of $2,280 decrease of $5,000

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