lacob Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the productfor $153.00 per unit.Sales volume (units)Cost of salesSelling and administrative costsThe best estimate of the total contribution margin when 13,360 units are sold is:Multiple ChoiceOO$755,310$641,280$338,770$430,85012,400$ 954,800$ 688,00013,590$ 1,046,430$ 721,320

The high low method is used to separate the fixed and variable Costs from the mixed costs of the…

Answered: lacob Corporation is a wholesaler that…

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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Lattimer Company had the following results of operations for the past year: Contribution margin income statement Sales (18,000 units) Variable costs Direct materials Direct labor Overhead Contribution margin Fixed costs Fixed overhead Fixed selling and administrative expenses Income Multiple Choice O $6,000 profit. Per Unit $ 12.00 $4,000 loss. 1.50 4.00 1.00 5.50 1.00 1.40 $ 3.10 A foreign company offers to buy 6,000 units at $7.50 per unit. In addition to variable costs, selling these units would add a $0.25 selling expense for export fees. Lattimer's annual production capacity is 28,000 units. If Lattimer accepts this additional business, the special order will yield a: Annual Total $ 216,000 27,000 72,000 18,000 99,000 18,000 25, 200 $ 55,800
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…
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Required information [The following information applies to the questions displayed below] Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales (9,700 units at $280 each) Variable costs (9,700 units at $210 each) Contribution margin Fixed costs Income 1. Amount of sales 2. Margin of safety 1. Assume Hudson has a target income of $163,000. What amount of sales (in dollars) is needed to produce this target income? 2. If Hudson achieves its target income, what is its margin of safety (in percent)? (Round your answer to 1 decimal place.) $ 2,716,000 2,037,000 679,000 441,000 $ 238,000 %
A company reports the following contribution margin income statement. Contribution Margin Income Statement For Year Ended December 31 Sales (19,200 units at $22.50 each) Variable costs (19,200 units at $18.00 each) Contribution margin. Fixed costs Income The manager believes the company can increase sales volume to 22,000 total units by increasing advertising costs by $16,200. Required A Required B Complete this question by entering your answers in the tabs below. Contribution Margin Income Statement For Year Ended December 31 $ 432,000 345,600 Prepare a contribution margin income statement assuming the company incurs the additional advertising costs and sales volume increases to 22,000 units. Sales Variable costs Contribution margin 86,400 64,800 $ 21,600 Fixed costs Income
Jenna Corporation sells a single product. Management has provided the following data for two levels of monthly sales volume. The company sells the product for $172.50 per unit. Sales Volume in Units 4,000 5,000 Cost of Sales (COS) $307,600 $384,500 Selling, General & Administrative Costs (SG&A) $321,200 $337,000 Selling Price Per Unit $173 Total costs for these cost categories and may include both Fixed and Variable costs. HINT: See high-low analysis. 1. Calculate the total contribution margin when 4,300 units are sold. 2. What is the breakeven point in Sales dollars if Advertising (a fixed SG&A cost) is increased by $40,000? Please show calculations.
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Ramirez Corp. has two customers, C1 and C2. Ramirez Corp currently allocates indirect costs to customers at a rate of 5% of customer revenue. Data for C1 and C2 are as follows: C1 C2 Selling Price per Unit $20.00 $20.00 Units Sold 50,000 12,000 Manufacturing Cost per unit $15.00 $15.00 Number of Purchase Orders 112 27 Number of deliveries 105 68 Number of Inspection 77 50 Customer Visits 40 35 A. Using the current costing system to allocate support costs, calculate Operating Income for customers C1 and C2. Ramirez Corp.'s Management Accountant has gathered the following ABC rate information: ABC Cost Rate Number of purchase orders $40 per purchase order $85 per delivery $200 per expedited delivery Number of deliveries Number of inspections Number of customer visits $400 per customer visit b. Calculate the total support cost allocated to C1 & C2 using the Activity Based Costing (ABC) system. c. Comparing the indirect cost allocated in part a. to the indirect cost allocated in part b.…
Cassius Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. Sales (7,000 units) Variable expenses Contribution margin Fixed expenses Net operating income The number of units that must be sold to achieve a target profit of $31,500 is closest to: 35,000 units 42,000 units 9,400 units $ 210,000 136,500 73,500 67,200 6,300 48,000 units
Crane Corporation produces and sells two products, Basic and Super. Data for activity during March are as follows: Basic Super Sales $213,000 $263,000 Contribution margin 25% 28% Total fixed costs $78,000 $78,000 Prepare a segment margin income statement. Omit the heading. Common fixed costs of $38,000 are allocated Basic and $43,000 to Super. (If the amount is negative then enter with a negative sign preceding the number, e.g. -5,125 or parenthesis, e.g. (5,125).) Basic Super Total $ $ $ tA
Cullumber Company makes three models of tasers. Information on the three products is given below. Sales Variable expenses Contribution margin Fixed expenses Net income (a) Net income $ (b) Shocker Net Income Tingler $300,000 $500,000 Tingler Net Income $ Total Net Income (c) Why or why not? Compute current net income for Cullumber Company. ta Net income would 151,400 148,600 $ 119,400 S $29,200 Fixed expenses consist of $298,000 of common costs allocated to the three products based on relative sales, as well as direct fixed expenses unique to each model of $30,000 (Tingler), $80,800 (Shocker), and $34,300 (Stunner). The common costs will be incurred regardless of how many models are produced. The direct fixed expenses would be eliminated if that model is phased out. James Watt, an executive with the company, feels the Stunner line should be discontinued to increase the company's net income. Shocker 197,000 303,000 229,800 $73,200 Compute net income by product line and in total for…
Use this information for Carter Co. to answer the question that follows. Carter Co. sells two products, arks and bins. Last year, Carter sold 14,000 units of arks and 56,000 units of bins. Related data are as follows: Product Unit Selling Price Unit Variable Cost Unit Contribution Margin Arks Bins $120 80 $80 60 $40 20 Assuming that last year's fixed costs totaled $960,000, what was Carter Co.'s break-even point in sales units? a. 12,000 units O b. 28.000 units O c. 35,000 units O d. 40.000 units 13

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