Klamath Company produces a single product. The projected income statement for the coming year is as follows: Sales (76,900 units @ $26.00) Total variable cost Contribution margin Total fixed cost Operating income Required: Unit contribution margin Break-even units 1. Compute the unit contribution margin and the units that must be sold to break even. 16.64 ✔ 83,100 units $1,999,400 719,784 $ 1,279,616 1,382,784 $ (103,168) 0.64 X % 2. Suppose 10,000 units are sold above breakeven. What is the operating income? 269,568 X 3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenu Contribution margin ratio Break-even sales revenue 2,160,600 ✓ Suppose that revenues are $200,000 more than expected for the coming year. What would the total operating income be?
Klamath Company produces a single product. The projected income statement for the coming year is as follows: Sales (76,900 units @ $26.00) Total variable cost Contribution margin Total fixed cost Operating income Required: Unit contribution margin Break-even units 1. Compute the unit contribution margin and the units that must be sold to break even. 16.64 ✔ 83,100 units $1,999,400 719,784 $ 1,279,616 1,382,784 $ (103,168) 0.64 X % 2. Suppose 10,000 units are sold above breakeven. What is the operating income? 269,568 X 3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenu Contribution margin ratio Break-even sales revenue 2,160,600 ✓ Suppose that revenues are $200,000 more than expected for the coming year. What would the total operating income be?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Basic Cost-Volume-Profit Concepts
Klamath Company produces a single product. The projected income statement for the coming year is as follows:
Sales (76,900 units @ $26.00)
Total variable cost
Contribution margin
Total fixed cost
Operating income
Required:
Break-even units
16.64 ✔
1. Compute the unit contribution margin and the units that must be sold to break even.
Unit contribution margin
83,100
Contribution margin ratio
$1,999,400
units
719,784
$ 1,279,616
1,382,784
$ (103,168)
2. Suppose 10,000 units are sold above breakeven. What is the operating income?
269,568 X
3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue.
0.64 X %
Break-even sales revenue
2,160,600
Suppose that revenues are $200,000 more than expected for the coming year. What would the total operating income be?
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