Mildura Pty Ltd produced and sold 45,000 units of a single product last year. Data concerning the year's income statement is as follows: Sales revenue Manufacturing costs: $1,350,000 Variable $585,000 Fixed $270,000 Selling costs: Variable costs $40,500 Fixed costs $54,000 Administrative costs: Variable costs $184,500 $108,000 Fixed costs Assuming sales revenue increases by 15 percent, what will be the percentage increase in profits before income taxes?
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- Last year’s contribution format income statement for Huerra Company is given below: Total Unit Sales $ 1,002,000 $ 50.10 Variable expenses 601,200 30.06 Contribution margin 400,800 20.04 Fixed expenses 316,800 15.84 Net operating income 84,000 4.20 Income taxes @ 40% 33,600 1.68 Net income $ 50,400 $ 2.52 The company had average operating assets of $491,000 during the year. Required: Compute last year’s margin, turnover, and return on investment (ROI). For each of the following questions, indicate whether last year’s margin and turnover will increase, decrease, or remain unchanged as a result of the events described, and then compute the new ROI. Consider each question separately. Using Lean Production, the company is able to reduce the average level of inventory by $100,000. The company achieves a cost savings of $10,000 per year by using less costly materials. The company purchases machinery and equipment that increase average operating assets by $125,000.…Last year’s contribution format income statement for Huerra Company is given below: Total Unit Sales $ 1,002,000 $ 50.10 Variable expenses 601,200 30.06 Contribution margin 400,800 20.04 Fixed expenses 316,800 15.84 Net operating income 84,000 4.20 Income taxes @ 40% 33,600 1.68 Net income $ 50,400 $ 2.52 The company had average operating assets of $491,000 during the year. Required: Compute last year’s margin, turnover, and return on investment (ROI). For each of the following questions, indicate whether last year’s margin and turnover will increase, decrease, or remain unchanged as a result of the events described, and then compute the new ROI. Consider each question separately. Using Lean Production, the company is able to reduce the average level of inventory by $100,000. The company achieves a cost savings of $10,000 per year by using less costly materials. The company purchases machinery and equipment that increase average operating assets by $125,000.…Last year’s contribution format income statement for Huerra Company is given below: Total Unit Sales $ 1,002,000 $ 50.10 Variable expenses 601,200 30.06 Contribution margin 400,800 20.04 Fixed expenses 316,800 15.84 Net operating income 84,000 4.20 Income taxes @ 40% 33,600 1.68 Net income $ 50,400 $ 2.52 The company had average operating assets of $491,000 during the year. Required: Compute last year’s margin, turnover, and return on investment (ROI). For each of the following questions, indicate whether last year’s margin and turnover will increase, decrease, or remain unchanged as a result of the events described, and then compute the new ROI. Consider each question separately. Using Lean Production, the company is able to reduce the average level of inventory by $100,000. The company achieves a cost savings of $10,000 per year by using less costly materials. The company purchases machinery and equipment that increase average operating assets by $125,000.…
- Whirly Corporation's contribution format income statement for the most recent month is shown below: Per Unit $31.00 18.00 $ 13.00 Sales (8,600 units) Variable expenses Contribution, margin Fixed expenses Net operating income Total $ 266,600 154,800 111,800 Required: (Consider each case independently): 1. Revised net operating income 2. Revised net operating income 3. Revised net operating income 56,000 $ 55,800 1. What would be the revised net operating income per month if the sales volume increases by 90 units? 2. What would be the revised net operating income per month if the sales volume decreases by 90 units? 3. What would be the revised net operating income per month if the sales volume is.7,600 units?The HASF Ink Ltd income statement for the preceding year is presented below except as noted the cost / revenue relationship for the coming year is expected to follow the same pattern as in the preceding year income statement for the year ending March 31 is as follows: Sales (200,000 units @ 2.5 Each) Rs. 5, 00,000 Variable cost 3, 00,000 Contribution margin 2, 00,000 Less Fixed cost 100,000 Profit before tax 100,000 Less tax 35,000 Profit after tax 65,000 Required: 1- The company management feels that it should earn at least Rs.10000 pre taxes per annum on…During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 $ 900,000 555,000 345,000 294,000 $ 51,000 Sales (@$60 per unit) Cost of goods sold (@ $37 per unit) Gross margin Selling and administrative expenses* Net operating income * $3 per unit variable; $249,000 fixed each year. The company's $37 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($360,000+ 20,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Units produced Units sold Required 1 Year 1 20,000 15,000 Complete this question by entering your answers in the tabs below. Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net operating income in Year 1 and in Year 2? 3. Reconcile the absorption costing and the variable costing net operating income…
- Whirly Corporation's contribution format income statement for the most recent month is shown below: Per Unit $ 35.00 19.00 $16.00 Sales (8,700 units) Variable expenses Contribution margin Fixed expenses Net operating income. Required: (Consider each case independently): Total $ 304,500 165,300 1. Revised net operating income 2. Revised net operating income 3. Revised net operating income 139, 200 54,300 $ 84,900 1. What would be the revised net operating income per month if the sales volume increases by 60 units? 2. What would be the revised net operating income per month if the sales volume decreases by 60 units? 3. What would be the revised net operating income per month if the sales volume is 7,700 units?The contribution format income statement for Huerra Company for last year is given below: Total Unit Sales $ 992,000 $ 49.60 Variable expenses 595,200 29.76 Contribution margin 396,800 19.84 Fixed expenses 316,800 15.84 Net operating income 80,000 4.00 Income taxes @ 40% 32,000 1.60 Net income $ 48,000 $ 2.40 The company had average operating assets of $500,000 during the year. Required: 1. Compute the company’s margin, turnover, and return on investment (ROI) for the period. For each of the following questions, indicate whether the margin and turnover will increase, decrease, or remain unchanged as a result of the events described, and then compute the new ROI figure. Consider each question separately, starting in each case from the data used to compute the original ROI in (1) above. 2. Using Lean Production, the company is able to reduce the average level of inventory by $96,000. 3. The company achieves a cost savings of $6,000 per year by using less…Whirly Corporation's contribution format income statement for the most recent month is shown below: Sales (7,400 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $ 236,800 140,600 96,200 54,300 $ 41,900 Per Unit $32.00 19.00 $13.00 Required: (Consider each case independently): 1. Revised net operating income 2. Revised net operating income 3. Revised net operating income 1. What would be the revised net operating income per month if the sales volume increases by 80 units? 2. What would be the revised net operating income per month if the sales volume decreases by 80 units? 3. What would be the revised net operating income per month if the sales volume is 6,400 units?
- ValaDuring Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $63 per unit) Cost of goods sold (@ $36 per unit) Gross margin Selling and administrative expenses* Net operating income *$3 per unit variable; $255,000 fixed each year. The company's $36 unit product cost is computed as follows: Year 1 $ 1,008,000 576,000 432,000 303,000 $ 129,000 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($273,000 ÷ 21,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Units produced Units sold Year 1 21,000 16,000 Year 2 21,000 26,000 Year 2 $ 1,638,000 936,000 702,000 333,000 $ 369,000 $9 12 2 13 $36 Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net operating income in Year 1 and in Year 2? 3. Reconcile the absorption costing and the variable costing net…The contribution format income statement for Huerra Company for last year is given below: Total Unit Sales $ 998,000 $ 49.90 Variable expenses 598,800 29.94 Contribution margin 399,200 19.96 Fixed expenses 321,200 16.06 Net operating income 78,000 3.90 Income taxes @ 40% 31,200 1.56 Net income $ 46,800 $ 2.34 The company had average operating assets of $508,000 during the year. 3. The company achieves a cost savings of $6,000 per year by using less costly materials.