%XOThe estimated operating income will be $ 66,120.Requirement 5. Prove your answer to Requirement 4 by preparing a contribution margin income statement with a 40% increase in total sales. (The sales mixremains unchanged.)Sweet Pea DonutsContribution Margin Income StatementMonth Ended August 31, 2016Sales RevenueVariable CostsContribution MarginFixed CostsOperating Income Data tableSweet Pea DonutsContribution Margin Income StatementMonth Ended August 31, 2016Sales RevenueVariable Costs:Cost of Goods SoldSelling CostsAdministrative CostsContribution MarginFixed Costs:Selling CostsAdministrative CostsOperating IncomePrint$ 32,10017,3001,80031,05010,350Done$ 128,000$1451,20076,80041,40035,400XMinimize

Operating income is the income generated from the operations of the entity. Variable costs are…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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nework Assignment i Help Submit Saved Save & Exit Check my work ! Required information [The following information applies to the questions displayed below.] Warner Clothing is considering the introduction of a new baseball cap for sales by local vendors. The company has collected the following price and cost characteristics. Sales price Variable costs 15 per unit 3 per unit 42,000 per month Fixed costs Assume that the company plans to sell 5,000 units per month. Consider requirements (b), (c), and (d) independently of each other. Required: a. What will be the operating profit? b. What is the impact on operating profit if the sales price decreases by 10 percent? Increases by 20 percent? c. What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent? d. Suppose that fixed costs for the year are 10 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changes have on…
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Required information Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales (10,300 units at $375 each) Variable costs (10,300 units at $300 each) Contribution margin Fixed costs Income Exercise 18-18 (Algo) Evaluating strategies-price increase LO C2 If the company raises its selling price to $400 per unit. 1. Compute Hudson Company's contribution margin per unit. 2. Compute Hudson Company's contribution margin ratio. 3. Compute Hudson Company's break-even point in units. 4. Compute Hudson Company's break-even point in sales dollars. 1. Contribution margin 2. Contribution margin ratio 3. Break-even point 4. Break-even sales dollars $ 3,862,500 3,090,000 772,500 600,000 $ 172,500 per unit % units
Contribution Margin Review the contribution margin income statements for Cover-to-Cover Company and Biblio Files Company on their respective Income Statements. Complete the following table from the data provided on the income statements. Each company sold 81,800 units during the year. Cover-to-CoverCompany Biblio FilesCompany Contribution margin ratio (percent) % % Unit contribution margin $ $ Break-even sales (units) Break-even sales (dollars) $ $ Review the definitions of contribution margin ratio and unit contribution margin. Also review the formulas for break-even in terms of units sold and sales dollars. Income Statement - Cover-to-Cover Cover-to-Cover CompanyContribution Margin Income StatementFor the Year Ended December 31, 20Y8 Sales $409,000 Variable costs: Manufacturing expense $245,400 Selling expense 20,450 Administrative expense 61,350 (327,200) Contribution margin $81,800…
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Question: The contribution margin income statement of Liberty Coffee for July attached Liberty Coffee sells three small coffees for every large coffee. A small coffee sells for $3.00, with a variable expense of $1.50. A large coffee sells for $5.00, with a variable expense of $2.50.Requirements Determine the coffee shop's monthly breakeven point in the numbers of small coffees and large coffees. Prove your answer by preparing a summary contribution margin income statement at the breakeven level of sales. Show only two categories of expenses: variable and fixed and Compute the coffee shop's margin of safety in dollars.
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Problem 12-21 (Algo) Prepare a contribution margin format income statement; answer what-if questions LO 12-7, 12-8, 12-9 Shown here is an income statement in the traditional format for a firm with a sales volume of 7,500 units. Cost formulas also are shown: Revenues Cost of goods sold ($5,900 + $2.25/unit) Gross profit Operating expenses: Selling ($1,200 + $0.10/unit) Administrative ($3,500 + $0.20/unit) Operating income $34,400 22,775 $ 11,625 1,950 5,000 $ 4,675 Required: a. Prepare an income statement in the contribution margin format. b. Calculate the contribution margin per unit and the contribution margin ratio. c. Calculate the firm's operating income (or loss) if the volume changed from 7,500 units to 1. 11,250 units. 2. 3,750 units. d. Refer to your answer to part a for total revenues of $34,400. Calculate the firm's operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues 1. Increase by $14,500. 2. Decrease by $3,000.
Contribution Margin Ratio, Break-Even Sales Revenue, Sales Revenue for Target Profit Schylar Pharmaceuticals, Inc., plans to sell 105,000 units of antibiotic at an average price of $24 each in the coming year. Total variable costs equal $856,800. Total fixed costs equal $8,100,000 Required: 1. What is the contribution margin per unit? Round your answer to the nearest cent. $ What is the contribution margin ratio? Round your answer to two decimal places. (Express as a decimal-based answer rather than a whole percent amount.) 2. Calculate the sales revenue needed to break even. Round your answer to the nearest dollar. 3. Calculate the sales revenue needed to achieve a target profit of $240,000. Round your answer to the nearest dollar.

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