Lindon Company is the exclusive distributor for an automotive product that sells for $52.00 per unit and has a CM ratio of 30%. The company's fixed expenses are $366,600 per year. The company plans to sell 27,900 units this year. Required: 1. What are the variable expenses per unit? (Round your "per unit" answer to 2 decimal places.) 2. What is the break-even point in unit sales and in dollar sales? 3. What amount of unit sales and dollar sales is required to attain a target profit of $210,600 per year? 4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $5.20 per unit. What is the company's new break-even point in unit sales and dollar sales? What dollar sales is required to attain a target profit of $210,600? 1. Variable expense per unit 2. Break-even point in units Break-even point in dollar sales 3. Unit sales needed to attain target profit Dollar sales needed to attain target profit 4. New break-even point in unit sales New break-even point in dollar sales Dollar salos pooded to attain tergot profit
Lindon Company is the exclusive distributor for an automotive product that sells for $52.00 per unit and has a CM ratio of 30%. The company's fixed expenses are $366,600 per year. The company plans to sell 27,900 units this year. Required: 1. What are the variable expenses per unit? (Round your "per unit" answer to 2 decimal places.) 2. What is the break-even point in unit sales and in dollar sales? 3. What amount of unit sales and dollar sales is required to attain a target profit of $210,600 per year? 4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $5.20 per unit. What is the company's new break-even point in unit sales and dollar sales? What dollar sales is required to attain a target profit of $210,600? 1. Variable expense per unit 2. Break-even point in units Break-even point in dollar sales 3. Unit sales needed to attain target profit Dollar sales needed to attain target profit 4. New break-even point in unit sales New break-even point in dollar sales Dollar salos pooded to attain tergot profit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Info in images
![Gold Star Rice, Ltd., of Thailand exports Thai rice throughout Asia. The company grows three varieties of rice-White, Fragrant, and
Loonzain. Budgeted sales by product and in total for the coming month are shown below:
Product
White
Fragrant
Loonzain
Total
Percentage of total sales
Sales
Variable expenses
48 %
20 %
32 %
100 %
$ 369,600
$ 154,000
$ 246,400
$ 770,000
369,600
100 %
100 %
100 %
100 %
110,880
30 %
123, 200
80 %
135,520
55 %
48 %
Contribution margin
$ 258,720
70 %
%24
30,800
20 %
$ 110,880
45 %
400,400
52 %
Fixed expenses
232,960
Net operating income
$ 167,440
Fixed expenses
$232,960
Dollar sales to break-even
= $448,000
CM ratio
0.52
As shown by these data, net operating income is budgeted at $167,44O for the month and the estimated break-even sales is $448,000.
Assume that actual sales for the month total $770,000 as planned; however, actual sales by product are: White, $246,400; Fragrant,
$308,000; and Loonzain, $215,600.
Required:
1. Prepare a contribution format income statement for the month based on the actual sales data.
2. Compute the break-even point in dollar sales for the month based on your actual data.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Prepare a contribution format income statement for the month based on the actual sales data.
Gold Star Rice, Ltd.
Contribution Income Statement
Product
White
Fragrant
Loonzain
Total
Percentage of total sales
%
%
%
%
%
%
%
0 %
0 % $
0 %
0 %
Required 1
Required 2
Compute the break-even point in dollar sales for the month based on your actual data. (Do not round intermediate
calculations. Round your answer to the nearest whole dollar amount.)
Break-even point in dollar sales](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F561c1f4c-1ead-479c-a7b0-6cbaa357b0c6%2Fd05cd999-8bd2-4d8a-a4c0-4d50c2665276%2F64xxk6s_processed.png&w=3840&q=75)
Transcribed Image Text:Gold Star Rice, Ltd., of Thailand exports Thai rice throughout Asia. The company grows three varieties of rice-White, Fragrant, and
Loonzain. Budgeted sales by product and in total for the coming month are shown below:
Product
White
Fragrant
Loonzain
Total
Percentage of total sales
Sales
Variable expenses
48 %
20 %
32 %
100 %
$ 369,600
$ 154,000
$ 246,400
$ 770,000
369,600
100 %
100 %
100 %
100 %
110,880
30 %
123, 200
80 %
135,520
55 %
48 %
Contribution margin
$ 258,720
70 %
%24
30,800
20 %
$ 110,880
45 %
400,400
52 %
Fixed expenses
232,960
Net operating income
$ 167,440
Fixed expenses
$232,960
Dollar sales to break-even
= $448,000
CM ratio
0.52
As shown by these data, net operating income is budgeted at $167,44O for the month and the estimated break-even sales is $448,000.
Assume that actual sales for the month total $770,000 as planned; however, actual sales by product are: White, $246,400; Fragrant,
$308,000; and Loonzain, $215,600.
Required:
1. Prepare a contribution format income statement for the month based on the actual sales data.
2. Compute the break-even point in dollar sales for the month based on your actual data.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Prepare a contribution format income statement for the month based on the actual sales data.
Gold Star Rice, Ltd.
Contribution Income Statement
Product
White
Fragrant
Loonzain
Total
Percentage of total sales
%
%
%
%
%
%
%
0 %
0 % $
0 %
0 %
Required 1
Required 2
Compute the break-even point in dollar sales for the month based on your actual data. (Do not round intermediate
calculations. Round your answer to the nearest whole dollar amount.)
Break-even point in dollar sales
![Lindon Company is the exclusive distributor for an automotive product that sells for $52.00 per unit and has a CM ratio of 30%. The
company's fixed expenses are $366,600 per year. The company plans to sell 27,900 units this year.
Required:
1. What are the variable expenses per unit? (Round your "per unit" answer to 2 decimal places.)
2. What is the break-even point in unit sales and in dollar sales?
3. What amount of unit sales and dollar sales is required to attain a target profit of $210,600 per year?
4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $5.20 per unit. What is the
company's new break-even point in unit sales and in dollar sales? What dollar sales is required to attain a target profit of $210,600?
1.
Variable expense per unit
2. Break-even point in units
Break-even point in dollar sales
3.
Unit sales needed to attain target profit
Dollar sales needed to attain target profit
4. New break-even point in unit sales
New break-even point in dollar sales
Dollar sales needed to attain target profit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F561c1f4c-1ead-479c-a7b0-6cbaa357b0c6%2Fd05cd999-8bd2-4d8a-a4c0-4d50c2665276%2F9fnkc2i_processed.png&w=3840&q=75)
Transcribed Image Text:Lindon Company is the exclusive distributor for an automotive product that sells for $52.00 per unit and has a CM ratio of 30%. The
company's fixed expenses are $366,600 per year. The company plans to sell 27,900 units this year.
Required:
1. What are the variable expenses per unit? (Round your "per unit" answer to 2 decimal places.)
2. What is the break-even point in unit sales and in dollar sales?
3. What amount of unit sales and dollar sales is required to attain a target profit of $210,600 per year?
4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $5.20 per unit. What is the
company's new break-even point in unit sales and in dollar sales? What dollar sales is required to attain a target profit of $210,600?
1.
Variable expense per unit
2. Break-even point in units
Break-even point in dollar sales
3.
Unit sales needed to attain target profit
Dollar sales needed to attain target profit
4. New break-even point in unit sales
New break-even point in dollar sales
Dollar sales needed to attain target profit
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