Mark Pro produces and sells a single product. Information on its costs follow:Variable costs:SG&AP2 per unitProductionP4 per unitFixed costs:SG&AP12,000 per yearProductionP15,000 per year1. Refer to Mark Pro. Assume Mark Pro produced and sold 5,000 units. At this level of activity, it produced a profit ofP18,000. What was Mark Pro sales price per unit?2. Refer to Mark Pro. In the upcoming year, Mark Pro estimates that it will produce and sell 4,000 units. The variable costsper unit and the total fixed costs are expected to be the same as in the current year. However, it anticipates a sales price of P16per unit. What is Mark Pro 's projected margin of safety for the coming year?

The margin of safety is calculated as difference between current sales and break even sales of the…

Answered: Mark Pro produces and sells a single…

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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Brevard Industries produces two products. Information about the products is as follows: Product 1 Product 2 5,850 Units produced and sold Selling price per unit Variable costs per unit 11,900 18 13 20 14 The company's fixed costs totaled $B9,000, of which $16,900 can be directiy traced to Product 1 and $41.900 can be directly traced to Product 2. The effect on the firm's profits if Product 2 is dropped would be a: Multiple Cholce $42.600 increase. $17,600 decrease, $42,600 decrease. S17600 increase.
Lamp Company has the following cost-volume-profit (CVP) data: Breakeven point, in units 3,000 Selling price per unit $ 600 Total fixed costs $ 124,000 What is the variable cost per unit (rounded to two decimal places)?
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Compare the following two companies: Company A is a retail merchandise firm with current sales of $4,000,000 and a 45% contribution margin. Company A's fixed costs are $600,000. Company B is a service firm with current service revenue of $2,800,000 and a 15% contribution margin. Company B’s fixed costs are $375,000. The following names are to be considered when completing this problem: Operating Income Variable Costs Sales Fixed Costs per Unit Selling Price per Unit Variable Cost per Unit Contribution Margin Fixed Costs Operating Loss 1. Based on the information given, prepare a complete contribution margin income statement for Company A: Company AContribution Margin Income StatementProjected 2. Based on the information given, prepare a complete contribution margin income statement for Company B: Company BContribution Margin Income StatementProjected 3.Compute the degree of operating leverage for…
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