Last quarter when Sunset Manufacturing, Inc., sold 28,500 units, total sales were $427,500, total variable expenses were $299,250, and fixed expenses were $62,400. Required: 1. What is the company's contribution margin (CM) ratio? 2. What is the estimated change in the company's net operating income if it can increase total sales by $5,000?

Last quarter when Sunset Manufacturing, Inc., sold 28,500 units, total sales were $427,500, total variable expenses were $299,250, and fixed expenses were $62,400. Required: 1. What is the company's contribution margin (CM) ratio? 2. What is the estimated change in the company's net operating income if it can increase total sales by $5,000?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 36P: Faldo Company produces a single product. The projected income statement for the coming year, based...

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Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?
How much will net income increase?
How much would you expect quarterly net operating income to increase?
What is the companys CM ratio?
If a company, sold 37,000 units, total sales were $148,000, total variable expenses were $105,080, and fixed expenses were $38,900. What is the company's contribution margin (CM) ratio? What is the estimated change in the companys net operating income if it can increase sales volum by 525 units and total sales by $2,100. Contribution margin ratio ___________________% Estimated change in net operating income ___________________%
Brightwood Furniture provides the following financial data for a given period: Sales Amount ($) Per Unit ($) 150,000 Less Variable Expenses 90,000 25 15 10 35,000 25,000 Contribution Margin 60,000 Less Fixed Expenses Net Income a. What is the company's CM ratio? b. If quarterly sales increase by $5,200 and there is no change in fixed expenses, by how much would you expect quarterly net operating income to increase?
Brightwood Furniture provides the following financial data for a
I want answer
What is the company's total contribution margin ?
Brightwood furniture provide the following data
1.) refer to the original data. Compute the company's margin of safety in both dollar and percentage terms ? 2.) what is the company's cm ratio? If he company can sell more units thereby increasing sales by $84000 per month and there is no change in fixed expense, by how much would you expect monthly net operating income to increase?
4.) refer to the orginal data. Compute the company's margin of safety in both dollar and percentage terms. 5.) what is the company's CM ratio? If the company can sell more units thereby increasing sales by $50000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?