General accounting Pacific Designs manufactures custom photo albumsthat sell for $45 each. The company's financial data forthe previous quarter is as follows:ItemSales revenueVariable expensesAmount$720,000$480,000Contribution margin $240,000Fixed expensesOperating income$180,000$60,000How many photo albums will Pacific Designs need tosell to achieve a target operating income of $90,000 perquarter?

Determine the Contribution Margin per UnitThe contribution margin per unit is calculated…

Answered: Pacific Designs manufactures custom…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 6CE

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Milden Company is a merchandiser that plans to sell 43,000 units during the next quarter at a selling price of $67 per unit. The company also gathered the following cost estimates for the next quarter: Cost Cost of good sold. Advertising expense Sales commissions Shipping expense Administrative salaries Insurance expense Depreciation expense Cost Formula $34 per unit sold $190,000 per quarter. 5% of sales $36,000 per quarter + $4.00 per unit sold $100,000 per quarter $11,000 per quarter $70,000 per quarter Required: 1. Prepare a contribution format income statement for the next quarter. 2. Prepare a traditional format income statement for the next quarter.
North East printing produces posters of popular music groups for sale at concerts and festivals. The company has fixed expenses of $319,500 per month pla sells each poster for $9.50. North East has a target monthly income of $213,000. What is North East's operating leverage if it achieves its operating income OA. 4.0 OB. 2.5 OC. 0.4 O D. 1.0
Milden Company is a merchandiser planning to sell 12,000 units next quarter at a selling price of $100 per unit. The company also gathered the following cost estimates for the next quarter: Cost Cost of goods sold Advertising expense Sales commissions Shipping expense Administrative salaries Insurance expense Depreciation expense Cost Formula $35 per unit sold $210,000 per quarter 6% of sales $28,000 per quarter + $9.10 per unit sold $145,000 per quarter $9,000 per quarter $76,000 per quarter Required: 1. Prepare a contribution format income statement for the next quarter. 2. Prepare a traditional format income statement for the next quarter.
Milden Company is a merchandiser that plans to sell 12,000 units during the next quarter at a selling price of $100 per unit. The company also gathered the following cost estimates for the next quarter: Cost Cost Formula Cost of good sold $35 per unit sold Advertising expense $210,000 per quarter 6% of sales Sales commissions Shipping expense Administrative salaries $28,000 per quarter + $9.10 per unit sold $145,000 per quarter Insurance expense $9,000 per quarter Depreciation expense $76,000 per quarter Required: 1. Prepare a contribution format income statement for the next quarter. 2. Prepare a traditional format income statement for the next quarter.
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Western Repair Shop has a monthly target operating income of $50,000. Variable expenses are 55% of sales and monthly fixed expenses are $9,600. Requirements 1. Compute the monthly margin of safety in dollars if the shop achieves its income goal. 2. Express Western Repair Shop's margin of safety as a percentage of target sales. 3. What is Western Repair Shop's operating leverage factor at the target level of operating income? 4. Assume that the repair shop reaches its target. By what percentage will Western Repair Shop's operating income fall if sales volume declines by 16%? Requirement 1. Compute the monthly margin of safety in dollars if the shop achieves its income goal. Begin by identifying the formula to compute the margin of safety. Target sales in dollars Margin of safety in dollars The margin of safety is $. (Round interim calculations up to the nearest whole dollar and your final answer up to the nearest whole dollar.) Break-even sales in dollars =
The company is formulating its plans for the coming fiscal year. Following is the data used to project the current year's after-tax net income of $110,400. Average selling price $4.00 per box Average Variable Costs: cost of candy 2.00 per box selling expenses 0.40 per box 2.40 per box Annual fixed costs: selling 160,000 administrative 280,000 440,000 Expected annual sales volume (390,000 boxes) 1,560,000 Tax Rate 40% Manufacturers of candy have announced that they will increase prices of their products an average of 15 percent in the coming year due to the increase in raw materials and labor costs. 1. What volume of sales in $ must the company achieve in the coming year to maintain the same net income after taxes as projected for the current year if the selling price of candy remains at $4 per box and the cost of candy increases 15 percent? 2. How many units would have to be sold next year to generate a net income equal 10 percent of revenue?
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Milden Company is a merchandiser that plans to sell 37,000 units during the next quarter at a selling price of $61 per unit. The company also gathered the following cost estimates for the next quarter: Cost Cost Formula Cost of good sold Advertising expense $31 per unit sold $181,000 per quarter Sales commissions 6% of sales $63,000 per quarter + $4.00 per unit sold $91,000 per quarter $10,100 per quarter $61,000 per quarter Shipping expense Administrative salaries Insurance expense Depreciation expense Required: 1. Prepare a contribution format income statement for the next quarter. 2. Prepare a traditional format income statement for the next quarter. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a traditional format income statement for the next quarter. Milden Company Traditional Format Income Statement For the Next Quarter Selling and administrative expenses: Total selling and administrative expenses

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