Nobel Company sells three products: X, Y, and Z. Budgeted sales by product and in total for the coming month are as follows: % of total sales Sales Variable expenses Contribution margin Fixed expense Operating income X = $195,000 Y = $435,000 Z = $120,000 Required: Product X 30% Product Y 50% Product Z 20% $225,000 100% 67,500 30% $157,500 70% $75,000 $375,000 100% $150,000 100% $750,000 100% 300,000 80% 82,500 55% 450,000 60% 20% $ 67,500 45% $300,000 40% As shown by these data, operating income is budgeted at $104,000 for the month. Assume that actual sales for the month total $750,000 as planned. Actual sales by product, however, are: essibility: Investigate Total 100% a) Calculate the break-even sales for the coming month, based on budgeted data. 196,000 $104,000 c) Calculate the break-even sales for the month, based on actual data. b) Prepare a contribution income statement for the month based on actual sales data. Assume variable expenses are a percentage of sales and total fixed expenses are the same as budgeted. Present the income statement in the same format as shown above. d) Explain why the company did not meet the budgeted operating income or break-even sales even though it met its $500,000 sales budget. | Focu
Nobel Company sells three products: X, Y, and Z. Budgeted sales by product and in total for the coming month are as follows: % of total sales Sales Variable expenses Contribution margin Fixed expense Operating income X = $195,000 Y = $435,000 Z = $120,000 Required: Product X 30% Product Y 50% Product Z 20% $225,000 100% 67,500 30% $157,500 70% $75,000 $375,000 100% $150,000 100% $750,000 100% 300,000 80% 82,500 55% 450,000 60% 20% $ 67,500 45% $300,000 40% As shown by these data, operating income is budgeted at $104,000 for the month. Assume that actual sales for the month total $750,000 as planned. Actual sales by product, however, are: essibility: Investigate Total 100% a) Calculate the break-even sales for the coming month, based on budgeted data. 196,000 $104,000 c) Calculate the break-even sales for the month, based on actual data. b) Prepare a contribution income statement for the month based on actual sales data. Assume variable expenses are a percentage of sales and total fixed expenses are the same as budgeted. Present the income statement in the same format as shown above. d) Explain why the company did not meet the budgeted operating income or break-even sales even though it met its $500,000 sales budget. | Focu
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Nobel Company sells three products: X, Y, and Z. Budgeted sales by product and in total for the
coming month are as follows:
% of total sales
Sales
Variable expenses
Contribution margin
Fixed expense
Operating income
X = $195,000
Y = $435,000
Z = $120,000
Required:
Product X
30%
$225,000 100%
67,500 30%
$157,500 70% $75,000
Product Y
50%
Total
Product Z
20%
100%
$150,000 100% $750,000 100%
82,500 55% 450,000
20% $ 67,500 45% $300,000
60%
40%
196,000
$104,000
As shown by these data, operating income is budgeted at $104,000 for the month.
Assume that actual sales for the month total $750,000 as planned. Actual sales by product,
however, are:
$375,000 100%
300,000 80%
a) Calculate the break-even sales for the coming month, based on budgeted data.
essibility: Investigate
b) Prepare a contribution income statement for the month based on actual sales data. Assume
variable expenses are a percentage of sales and total fixed expenses are the same as
budgeted. Present the income statement in the same format as shown above.
c) Calculate the break-even sales for the month, based on actual data.
d) Explain why the company did not meet the budgeted operating income or break-even sales
even though it met its $500,000 sales budget. |
Focu
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