Multiple-Product Break-even, Break-Even Sales RevenueCherry Blossom Products Inc. produces and sells yoga-training products: how-to DVDS and a basic equipment set (blocks, strap, and small pillows). Last year, CherryBlossom Products sold 13,500 DVDs and 4,500 equipment sets. Information on the two products is as follows:PriceDVDsEquipment Sets$8$25Variable cost per unitTotal fixed cost is $76,250.15Suppose that in the coming year, the company plans to produce an extra-thick yoga mat for sale to health clubs. The company estimates that 9,000 mats can be sold atprice of $17 and a variable cost per unit of $11. Total fixed cost must be increased by $25,410 (making total fixed cost $101,660). Assume that anticipated sales of theother products, as well as their prices and variable costs, remain the same.Part 1: Sales Mix Instructions and Part 2: Break-Even1. What is the sales mix of DVDs, equipment sets, and yoga mats?3:1122. Compute the break-even quantity of each product.Break-even DVDSBreak-even equipment setsunitsunitsunitsBreak-even yoga matsPart 3a: Income Statement3a. Prepare an income statement for Cherry Blossom Products for the coming year.Cherry Blossom Products Inc.Income StatementFor the Coming YearPart 3b: Contribution Margin Ratio and Part 4: Margin of Safety3b. What is the overall contribution margin ratio? Use the contribution margin ratio to compute overall break-even sales revenue. (Note: Round the contribution marginratio to the nearest whole percent; round the break-even sales revenue to the nearest dollar.)Overall contribution margin ratioOverall break-even sales revenue4. Compute the margin of safety for the coming year in sales dollars.

Sale mix = DVD (13,500):Equipment sets(4,500):Yoga mats(9,000) = 3:1:2

Answered: Part 3b Contribution Margin Ratio and…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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3.1 REQUIRED Study the information provided below and answer the following questions:3.1.1 If the sales manager’s proposal is rejected, calculate the total revenues at break-even by using the contribution margin ratio. (4 marks) 3.1.2 Calculate the additional expenditure that the company can afford to spend on advertising, in keeping with the sales manager’s proposal. (4 marks) 3.1.3 Calculate the break-even quantity if the sales manager’s proposal is accepted (using the proposed new selling price and the increase in the advertising outlay). (4 marks)INFORMATION Denel Enterprises manufactures a product that sells for R180 each.The company presently produces and sells 120 000 units per year. Unit variable manufacturing expenses and variable selling expenses are R90 and 10% of the sales price respectively. Fixed costs are R4 536 000 for manufacturing overheads and R1 944 000 for selling and administrative activities. The sales manager has proposed that the price be increased to R216 per…
Take into account the possibility of raising the cost of a good with an 8% profit margin. Calculate the effect of this price increase on the profit margin if you could raise the price by 1% while keeping the sales volume (in unit terms) at the same level as before the price increase. (Assume there are no fixed costs while answering this question. Only the percentage change in profit margin has to be calculated.)
3
Ay 3. Suppose the cost and the demand for a daily product is: C=10 d(p) = D(1 - w(p)) = 200-10p What is the total contribution (profit) based on the optimal price?
Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows: Estimated Estimated Variable Cost Fixed Cost (per unit sold) Production costs: Direct materials $15 Direct labor 10 Factory overhead $451,600 Selling expenses: Sales salaries and commissions 93,800 Advertising 31,800 Travel 7,100 Miscellaneous selling expense 7,800 Administrative expenses: Office and officers' salaries 91,700 Supplies 11,300 Miscellaneous administrative expense 10,500 Total $705,600 $42 It is expected that 10,800 units will be sold at a price of $140 a unit. Maximum sales within…
What can the weighted average contribution margin ratio be used for? Multiple Choice To solve for a measure, at any level of sales volume, of the sensitivity of operating profit to changes in volume. Breakeven and profit planning for sales volume expressed in dollars (Y) rather than units (Q). To calculate an average per-unit contribution margin based on an assumed sales mix. To figure out the relative proportion in which a company’s products (or services) are sold. To determine the extent of fixed costs in an organization’s cost structure.
On the break-even chart you can see the three variants of the break-even points. Name the items marked with numbers in the figure. Choose the correct answers. 7 10 6 Choose... Choose... 7 Choose... 1 Choose... 9. Choose... v Choose... Total cost function (linear) Turning point of profitability Target profit (expected profit) Turning point of economic efficiency Volume Amortisation Total cost - amortisation Total revenue function Turning point of liquidity Total cost + Target profit
On the CVP graph, the next unit sold will increase sales by an amount equal to the Select one: O a. Contribution margin ratio O b Selling price per unit minus the variable.costs per unit Oc Variable costs per unit Od. Difference between contribution margin and fixed costs O e. Selling price per unit
Please explain this statement thoroughly. "To estimate what the profit will be at various levels of activity, multiply the number of units to be sold above or below the break-even point by the unit contribution margin."
Please help me. Thankyou.
2. What is the expected contribution margin ratio? Round to the nearest whole percent. 3. Determine the break-even sales in units and dollars. 4. Construct a cost-volume-profit chart on your own paper. What is the break-even sales? 5. What is the expected margin of safety in dollars and as a percentage of sales? (Round to the nearest whole percent.) 6. Determine the operating leverage. Round to one decimal place.
What are the answers for the following? Construct a cost-volume-profit chart on your own paper. What is the break-even sales? What is the expected margin of safety in dollars and as a percentage of sales? Determine the operating leverage. Round to one decimal place.

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