Morgan Technologies sells a single product at $30 per unit. The firm's most recentincome statement revealed unit sales of 70,000, variable costs of $630,000, and fixedcosts of $360,000. If a $6 drop in selling price will boost unit sales volume by 20%, thecompany will experience:Multiple ChoiceOOno change in profit because a 20% drop in sales price isbalanced by a 20% increase in volume.an $47,000 drop in profit.a $210,000 drop in profit.a $360,000 drop in profit.None of the answers is correct.

MARGINAL COSTING INCOME STATEMENT Marginal Costing Income Statement is One of the Important Cost…

Answered: Morgan Technologies sells a single…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 8EA: Marchete Company produces a single product. They have recently received the results of a market...

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Marchete Company produces a single product. They have recently received the results of a market survey that indicates that they can increase the retail price of their product by 8% without losing customers or market share. All other costs will remain unchanged. Their most recent CVP analysis is shown. If they enact the 8% price increase, what will be their new break-even point in units and dollars?
Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?
Baghdad Company produces a single product. They have recently received the result of a market survey that indicates that they can increase the retail price of their product by 10% without losing customers or market share. All other costs will remain unchanged. If they enact the 10% price increase, what will be their new break-even point in units and dollars? Their most recent CVP analysis is:
Daniel sells a single product at P20 per unit. The firm's most recent income statement revealed unit sales of 100,000, variable costs of P800,000, and fixed costs of P400,000. If a P4 drop in selling price will boost unit sales volume by 20%, the company will experience: no change in profit because a 20% drop in sales price is balanced by a 20% increase in volume. an P80,000 drop in profitability. a P240,000 drop in profitability. a P400,000 drop in profitability. a change in profitability other than those above.
Use the following information about Rat Race Home Security, Inc. to answer the questions: Average selling price per unit $324. Variable cost per unit $187 Units sold 449 Fixed costs $8,589 Interest expense 17,204 Based on the data above, what will be the resulting percentage change in earnings per share of Rat Race Home Security, Inc. if they expect operating profit to change 4.2 percent? (You should calculate the degree of financial leverage first). (Write the percentage sign in the "units" box).
4.) refer to the orginal data. Compute the company's margin of safety in both dollar and percentage terms. 5.) what is the company's CM ratio? If the company can sell more units thereby increasing sales by $50000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?
Flyer Company sells a product in a competitive marketplace. Market analysis indicates that its product would probably sell at $48 per unit. Flyer management desires a 12.5% profit margin on sales. Flyer's current full cost for the product is $44 per unit. If the company cannot cut costs any lower than they already are, the profit margin on sales to meet the market selling price would be a.10.3% b.7.3% c.8.3% d.9.3%
Papaya Corporation has the following product information: Sales price $9.00per unit Variable cost $5.00per unit per Fixed cost $22,000month lunits per Volume 10,500month The company believes that the volume will go up to 13,000 units if the company reduces its sales price to $7.50. How would this change affect operating income? O It will decrease by $20,000. O It will incrcase by $9500. O It will decrease by $9500. O It will increase by $20,000. Next > Previous
The BEP Company plans to market a new product. Based on its market studies, it estimates that it can sell 70,000 units in 2016. The selling price per unit is P20.00. The variable cost ratio is 40% sales. The fixed cost is P60,000.00 1) Compute the Break-even point in: a) units b) in sales pesos 2) Assume desired profit is P140,000, compute for the volume of production 3) Compute for the break-even price
P Company has provided the following data: Sales Price per unit: $50 Variable Cost per unit: $30 Fixed Cost: $135,000 Expected Sales: 20,000 units a) What is the breakeven point in sales dollars? b) What is the current margin of safety? c) If the company wants to have net income of $70,000, how many units must they sell?
An economist estimates the demand function as P = 1250 15Q, where P is in dollars and Q is in number of Ipads sold per week. They also estimates that expenses vary with output according to the following cost equation: TC = 5000 + 25Q - 7.5Q2 + 1/3 Q^3 Suppose intense competition brings down prices and revenues. Calculate at what prices will the firm for each of the following cases: a) Make a normal profit? b) Incurs a loss but should continue to produce in the short - run? c) Incurs a loss but should shut down? With P = 815 and Q = 29
1.) refer to the original data. Compute the company's margin of safety in both dollar and percentage terms ? 2.) what is the company's cm ratio? If he company can sell more units thereby increasing sales by $84000 per month and there is no change in fixed expense, by how much would you expect monthly net operating income to increase?

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