Let: BES= break-even sales, R = revenue per unit, F = fixed costs, V = variable cost per unit, CMR = contribution ratio, CM =contribution margin per unit, S x R = sales dollars, S = sales in units [(S x R) - (F/CMR)]/(S x R) is the:break even point in unitsbreak even point in salessales mix compositemargin of safety0000

Break-even sales shows the amount of sales to generate 0 net income. At this point, total revenue is…

Answered: Let: BES= break-even sales, R = revenue…

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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Whirly has the following information for 2015. They sell Flying Carpets. Sales Contribution Margin Net Income 1. Complete a table for Whirly. Total $400,000 $150,000 $15,000 CVP and BEP Quantity 10,000 Flying Carpets Per Unit Ratio To Sales
Given the mixed cost function y = $6.50x + $3,000. What does the $6.50 represent? a.Total cost per unit of the cost driver b.The fixed cost per unit c.The slope of the cost function d.Total fixed costs
Cost, revenue, and profit are in dollars and x is the number of units. If the total profit function is P(x) = 3x – 18, find the marginal profit MP. MP = What does this mean? O This is the total cost. O The next unit sold costs this much to make. O This is the total revenue. O The next unit sold earns this much profit. O This is the total profit.
ASDF Corporate Income Statement Current Year Units Sold 100,000 $37.84 $3, 784,000 $1,284,000 Unit Price Sales Revenue Variable Expenses (Materials & Labor) Fixed Expenses (Marketing & Overhead) Earnings Before Interest & Taxes $350,000 $2,150,000 (ЕВIT) $198,000 $1,952,000 Paid Interest Earnings Before Taxes (EBT) $664,000 Тахes Net Income after Taxes (NIAT) $1,288,000 $258,000 Dividends Retained Earnings $1,030,000
Wildhorse sells a learning system that helps preschool and elementary students learn basic math facts and concepts. The company income statement from last month is as follows: Total Per Unit Sales revenue $700,000 $50 Variable expenses 315,000 22.50 Contribution margin 385,000 $27.50 Fixed expenses 264,000 Operating income $ 121,000
TRUE OR FALSE. 1. Sales Revenue = Selling Price per unit x Total number of units sold 2. Operating income = Sales Revenue - Total variable cost - Total Fixed cost 3. Contribution margin = Sales Revenue - Total variable cost %3D 4. Contribution margin ratio = Contribution margin / sales Revenue 5. Variable cost ratio = Total variable cost/ Sales revenue 6. Break-even point in units = Fixed cost/Unit contribution margin
[The following information applies to the questions displayed below.] The Chapter 5 Form worksheet appearing below recreates the Review Problem example in the text. Download the Applying Excel form and enter formulas in all cells that contain question marks. For example, in cell B13 enter the formula "= B5". After entering formulas in all of the cells that contained question marks, verify that the dollar amounts match the example in the text. Required: 1. Check your worksheet by changing the fixed expenses to $270,000. If your worksheet is operating properly, the degree of operating leverage should be 10. If you do not get this answer, find the errors in your worksheet and correct them.
Chapter 5: Applying Excel Data Unit sales Selling price per unit Variable expenses per unit Fixed expenses Enter a formula into each of the cells marked with a ? below Review Problem: CVP Relationships Compute the CM ratio and variable expense ratio Selling price per unit Variable expenses per unit Contribution margin per unit CM ratio Variable expense ratio Compute the break-even point Break-even in unit sales Break-even in dollar sales Compute the margin of safety Margin of safety in dollars Margin of safety percentage Compute the degree of operating leverage Sales Variable expenses Contribution margin Fixed expenses Net operating income Percentage increase in net operating income 1 2 3 4 5 6 7 A Chapter 5: Applying Excel Data Unit sales Selling price per unit Variable expenses per unit Fixed expenses $ B Net operating income (loss) $ $ $ $ 135,000 C 36,000 units % 10 per unit 4 per unit 20,000 units $240,000 $60 per unit $45 per unit $60 per unit $45 per unit $15 per unit 25% 75%…
On the CVP graph, the next unit sold will increase sales by an amount equal to the Select one: O a. Contribution margin ratio O b Selling price per unit minus the variable.costs per unit Oc Variable costs per unit Od. Difference between contribution margin and fixed costs O e. Selling price per unit
1. The formula used to calculate the number of units needed in order to earn a target income is a. (Fixed costs + variable costs) / Sales b. (Fixed costs + target income) / Sales c. (Fixed costs + target income) / CM per unit d. (Fixed costs + variable costs) / CM per unit 2. The indifference point is reached when * a. The savings in variable cost is equal to the increase in fixed costs. b. The savings in variable cost is less than the increase in fixed costs. c. The savings in fixed cost is equal to the decrease in variable cost. d. The savings in fixed cost is more than the increase in variable costs.' 3. Which of the following is not an assumption used to prepare a cost-volume-profit graph? * a. Constant sales mix b. Constant cost fluctuations c. Units produced equal units sold d. Liner costs within the relevant range
Suppose a ceiling fan manufacturer has the total cost function C(x) = 35x + 1200 and the total revenue function R(x) = 65x. (a) What is the equation of the profit function P(x) for this commodity? P(x) = (b) What is the profit on 20 units? P(20) = Interpret your result. The total costs are less than the revenue. The total costs are more than the revenue. The total costs are exactly the same as the revenue. (c) How many fans must be sold to avoid losing money? fans
Analyzi.ng a cost-volume-profit graph Determine each change effects the elements of the cost-volume profit graph by placing an X in the appropriate column(s).

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