Ocean City Kite Company sells kites for $9 per kite. In FY 2019, total fixed costs are expected to be $240,000 and variable costs are estimated at $3 a unit. Ocean City Kite Company wants to have an FY 2019 operating income of $90,000. Use this information to determine the number of units of kites that Ocean City Kite Company must sell in FY 2019 to meet this goal.

Ocean City Kite Company sells kites for $9 per kite. In FY 2019, total fixed costs are expected to be $240,000 and variable costs are estimated at $3 a unit. Ocean City Kite Company wants to have an FY 2019 operating income of $90,000. Use this information to determine the number of units of kites that Ocean City Kite Company must sell in FY 2019 to meet this goal.

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter7: The Master Budget And Flexible Budgeting

Section: Chapter Questions

Problem 10Q: If the sales forecast estimates that 50,000 units of product will be sold during the following year,...

See similar textbooks

Similar questions

ABB Company reported the results from sales of 5,000 units of Product Y for April 2022. See image.Assume that ABB plans to increase the selling price of Product Y by 10% in June 2022. How many units of the product would have to be sold to maintain an operating income of P20,000? Assume that ABB plans to increase the selling price of Product Y by 10% in June 2022. How many units of the product would have to be sold to earn a net income of P48,000? ABB is subject to 25% corporate income tax.
Jessup Company expects to incur manufacturing overhead costs of $20,000 each month during the year ending December 31, 2022 and direct production costs (i.e. direct labor and direct materials) of $126 per unit. Total units produced for the year ending December 31, 2022 are estimated to be 10,000 units. If the company desires to price its product at cost plus 50%, the sales price per unit would be which of the following amounts? $225 $192 $189
Assume the hotel’s ‘Room Revenue (Sales)’ was $1,640,000 during 2019. Based on the lodging forecast report, you expect the ‘Room Revenue (Sales)’ to increase by 3.7% next year. Assume the ‘Guest Supplies’ expenses (variable costs) from the room department was $246,000 during 2019. For 2020, this variable cost will remain at the same percentage of the Room Revenue (Sales) as experienced in 2019. Assume the ‘Salaries’ expenses (fixed costs) from the room department was $280,000 during 2019. For 2020, this fixed cost will increase by 2% due to the expected increase in living expenses in this area.
Indomitable Company sold 100,000 gallons of heating oil at P30 per gallon. Fifty thousand gallons were delivered on December 15, 2020, and the remaining 50,000 gallons were delivered on January 15, 2021.Payment terms were: 50% due on October 1, 2020, 25% on the first delivery, and the remaining 25% due on the second delivery.What amount of sales revenue should be recognized during 2020?
Part ASmart Swim Ltd manufactures and sells swimsuits for $40 each. The estimated income statement for 2020 is as follows:Sales $2,000,000Variable costs (1,100,000)Contribution margin 900,000Fixed costs (765,000)Pre-tax profit $135,000Required:Show all your workings.i. Calculate the company’s break-even point in units of swimsuits and sales dollars for 2020.ii. Calculate the company’s margin of safety in the units of swimsuits. iii. Assume the margin of safety in 2019 was 5,000 units of swimsuits. Are the company’s operations more or less risky in 2020 as compared to 2019? Explain. iv. Assume 2020’s actual sales revenue is $200,000 higher than the projected sales. Calculate the actual pre-tax profit of 2020 assuming the unit selling price, the unit variable cost and the total fixed costs remain constant. v. Assume a tax rate of 40%. Calculate the units of swimsuits that must be sold to earn an aftertax profit of $180,000 assuming the unit selling price, the unit variable cost and the…
check all details carefully and tell me true options with short details
Silverstone is a company that manufactures and sells electrical engines for electrical trucks. For its 2023 budget, Silverstone estimates that unit selling price is $10,000, variable manufacturing cost per engine is $5,000. Fixed costs are $600,000 per month. Sales team incurs a flat salary of $8,000 per month, which is already included in monthly fixed cost budget. On top of that, the sales commission is 5% of selling price. Required: a. What is the contribution margin per engine? b. What is the breakeven point in units and in revenues each month? (Show your calculation steps). C. At current price level, Silverstone expects to sell 140 units of its engine. If Silverstone lowers the price by 10%, the marketing team predicts that the sales will increase to 170 units. Is it a good decision? Using the result to illustrate why. d. What is the operating leverage level if Silverstone sells 150 units per month at current price?
Quality Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2024. The 2024 revenue and cost information for Quality follows: 1(Click the icon to view the revenue and cost information.) Assume each fender produced was sold for the standard price of $40, and total selling and administrative costs were $350,000. Prepare a standard cost income statement for 2024 for Quality Fender. (Use a minus sign or parentheses to enter any contra expenses. Enter all other amounts as positive numbers.) Quality Fender Standard Cost Income Statement For the Year Ended December 31, 2024 (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)…
Please answer all of the requirements. that would be 1 and 2 A B C. Thank you
If the sales forecast estimates that 50,000 units of product will be sold during the following year, should the factory plan on manufacturing 50,000 units in the coming year? Explain.
The cost data for Evencoat Paint for the year 2019 is as follows: Using the high-low method, express the companys maintenance costs as an equation where x represents the gallons of paint produced. Then estimate the fixed and variable costs. Predict the maintenance costs i190,000 gallons of paint are produced. Predict the maintenance costs if 81,000 gallons of paint are produced. Using Excel, create a scatter graph of the cost data and explain the relationship between gallons of paint produced and equipment maintenance expenses.
The cost data for BC Billing Solutions for the year 2020 is as follows: Using the high-low method, express the companys overtime wages as an equation where x represents number of invoices processed. Assume BC has monthly fixed costs of $3,800. Predict the overtime wages if 9,000 invoices are processed. Predict the overtime wages if 6,500 invoices are processed. Using Excel, create a scatter graph of the cost data and explain the relationship between the number of invoices processed and overtime wage expense.