Lawn Master Company, a manufacturer of riding lawn mowers, has a projected income for the coming year as follows:SalesOperating expenses:Variable expensesFixed expensesTotal expensesOperating profit$28,800,0009,400,000$48,000,0001. Breakeven point in sales dollars2. Required sales in dollars3. Breakeven point in sales dollars38,200,000$ 9,800,000Required:1. Determine the breakeven point in sales dollars.2. Determine the required sales in dollars to earn a before-tax profit of $13,000,000. (Do not round intermediate calculations. Roundyour answer to the nearest whole dollar amount.)3. What is the breakeven point in sales dollars if the variable expenses increases by 14% ? (Do not round intermediate calculations.Round your final answer to the nearest whole dollar amount.)

The break even sales are calculated as fixed costs divided by contribution Margin Ratio. The break…

Answered: Lawn Master Company, a manufacturer of…

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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Consider the following information from the income statement of Leighton Company: Contribution margin ratio 40% Fixed expenses $140,000 Selling price $100 Target profit $120,000 Unit contribution margin $40 What are the sales dollars required to attain a target profit of $120,000? multiple choice A. $60,000 B. $400,000 C. $10,000 D. $300,000
Assume Touch of Gray Salon, a Berkeley hair salon provides various hair styling services, including cuts, perms and shaves. Annual fixed costs are $225,000 and variable costs are 45% of sales revenue. Last year’s revenue totaled $450,000. Required: Determine the break-even point in sales dollars Determine the sales dollars required for an annual pretax profit of $200,000
bed Cruse Cleaning offers residential and small office cleaning services. An average cleaning service has the following price and costs. Sales price Variable costs Fixed costs $127.00 per service 89.00 per service 119,548 per year Cruse Cleaning is subject to an income tax rate of 22 percent. Required: a. How many cleaning services must Cruse Cleaning sell in a year to break even? ook b. How many cleaning services must Cruse Cleaning sell in a year to earn an annual operating profit of $32,604 after taxes? a Required sales in a year to break even int rences b. Required sales in a year to earn an annual operating profit of $32,604 after taxes: cleaning services cleaning services
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Engberg Company installs lawn sod in home yards. The company’s most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 134,000 100 % Variable expenses 53,600 40 % Contribution margin 80,400 60 % Fixed expenses 15,000 Net operating income $ 65,400 Required: 1. What is the company’s degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 14% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 14% increase in sales.
Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 86,000 100% Variable expenses 34,400 40% Contribution margin 51,600 60% Fixed expenses 40, 420 Net operating income $ 11,180 Required: 1. What is the company's degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 7% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 7% increase in unit sales.
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CVP Analysis, *What IT?" AnalysisKevin Co. projected contribution-format income statement for the upcoming month is shownBelow Sales (500 units) $10000Variable expenses. 4000Contributions margin. 6000Fixed expenses. 1000Net operating income. 5000Required:a.) Compute the breakeven point in units.b) Compute the breakeven paint in dollars.c.) If the company wishes to earn a monthly target profit of $10,000, how many units must be sold each month?d.) Compute the company's margin of safety. State your answer in both dollar and percentage terms,e.) The company's manager thinks that adding a salaried sales staff member at a cost of 52,000 per month will increase sales by $4,000 per month. If he is correct, what will be the net dollar advantage or disadvantage of making this change?t.) Refer to the original data, the company's manager believes that a new production process will improve profitability. He plans to add new machinery that will cut variable expenses…
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Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Incorporated, has been experiencing financial difficulty for some time. The company's contribution formaet Income statement for the most recent month is given below Sales (12,600 units $30 per unit) Variable expenses Contribution margin Fixed expenses $ 378,000 226,800 151,280 160,200 Net operating loss $ (18,000) Required: 1. Compute the company's CM ratio and its break-even point in unit sales and dollar sales. 2. The president believes that a $6,600 Increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will increase unit sales and the total sales by $82,000 per month. If the president is right, what will be the Increase (decrease) in the company's monthly net operating Income? 3. Refer to the original dets. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of $39,000 in the monthly advertising…
Engberg Company installs lawn sod in home yards. The company’s most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 130,000 100% Variable expenses 52,000 40% Contribution margin 78,000 60% Fixed expenses 20,000 Net operating income $ 58,000 Required: What is the company’s degree of operating leverage? Using the degree of operating leverage, estimate the impact on net operating income of a 25% increase in unit sales. (not able to upload a third image) but I need the correct answer to what is the "net operating income" Construct a new contribution format income statement for the company assuming a 25% increase in unit sales.

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