Problem 1 Xpress Corp. operates a fast food restaurant in San Fernando. Meals cost an average of $36 for which Xpress incurs variable costs of $14.40. Total fixed costs are $29,160. Required: a) Determine break even in units (persons) and sales dollars using the contribution margin technique. b) If the expected revenue is $ 65,000, what is Xpress' margin of safety ratio? c) If Xpress wants to earn a target income of $20,000, calculate the number of meals necessary.
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- Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below: Sales Variable expenses Contribution margin Fixed expenses Net operating income Claimjumper $57,600 38,400 $ 19, 200 Required: 1. What is the overall contribution margin (CM) ratio for the company? 2. What is the company's overall break-even point in dollar sales? 3. Prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of sales for the two products. Required 1 Required 2 Required 3 Complete this question by entering your answers in the tabs below. Sales Variable expenses Contribution margin Prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of sales for the two products. (Do not round intermediate calculations. Round your answers to the nearest dollar amount.) Engberg Company Contribution Income…Funday Park competes with Cool World by providing a variety of rides. Funday sells tickets at $85 per person as a one-day entrance fee. Variable costs are $17 per person, and fixed costs are $428,400 per month. Compute Funday Park's contribution margin ratio. Carry your computation to two decimal places. Use the contribution margin ratio approach to determine the sales revenue Funday Park needs to break even. Begin by selecting the formula labels and then enter the amounts to compute the contribution margin ratio. (Enter you answer to the nearest percent, X%.) ÷ = Contribution margin ratio ÷ = % Begin by selecting the formula and then entering the amounts to calculate the sales in dollars Funday needs to break even. (Abbreviation used: CM = contribution margin. Complete all input fields. For items with a zero value, enter "0".) ( + ) ÷ = Required sales in dollars…Calculating breakeven sales and sales to earn a target profit; preparing a contribution margin income statement Famous Productions performs London shows. The average show sells 1,000 rickets at $60 per ticket. There are 175 shows a year. No additional shows can be held as the theater is also used by other production companies. The average show has a cast of 60, each earning a net average of $320 per show. The cast is paid after each show. The other variable cost is a program-printing cost of $8 per guest. Annual fixed costs total $459,200. Requirements Compute revenue and variable costs for each show. Use the equation approach to compute the number of shows Famous Productions must perform each year to break even. Use the contribution margin ratio approach to compute the number of shows needed each year to earn a profit of $4,264,000. Is this profit goal realistic? Give your reasoning. Prepare Famous Productions’s contribution margin income statement for 175 shows performed in 2018.…
- Mission Foods produces two flavors of tacos—chicken and fish—with the following characteristics. Chicken Fish Selling price per taco $ 3.20 $ 5.00 Variable cost per taco 1.60 2.50 Expected sales (tacos) 196,000 305,000 The total fixed costs for the company are $116,000. Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix would be 43 percent chicken and 57 percent fish at the break-even point, compute the break-even volume using weighted-average contribution margin. c. If the product sales mix were to change to four chicken tacos for each fish taco, what would be the new break-even volume?3. Multiple product companies Pet Park International sells cat food and dog food. Its monthly fixed costs average $620,000. Cat food sales represent 80% of the company's total revenue. Dog food sales constitute the remaining 20%. The company has provided the following information expressed on a per-case basis: Cat food Dog food. Selling Contribution Price Margin $16 $40 $30 (a) The total monthly sales revenue required to break-even is $ (Rounded) (b) The total monthly sales revenue required to earn an operating income of $135,000 is $_ (c) The company's margin of safety at a monthly sales level of $2,500,000 is $_ (d) If monthly fixed costs increase by $10,000, the break-even point, expressed in sales dollars, will increase to $ok ces O'Reilly Incorporated makes and sells many consumer products. The firm's average contribution margin ratio is 22%. Management is considering adding a new product that will require an additional $10,500 per month of fixed expenses and will have variable expenses of $6.5 per unit. Required: a. Calculate the selling price that will be required for the new product if it is to have a contribution margin ratio equal to 22%. Note: Round your answer to 2 decimal places. b. Calculate the number of units of the new product that would have to be sold if the new product is to increase the firm's monthly operating income by $8,500. Note: Do not round intermediate calculations. a. Selling price b. Number of units per unit
- Mission Foods produces two flavors of tacos—chicken and fish—with the following characteristics. Chicken Fish Selling price per taco $ 3.60 $ 4.70 Variable cost per taco 1.80 2.35 Expected sales (tacos) 200,000 300,000 The total fixed costs for the company are $115,000. Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix would be 38 percent chicken and 62 percent fish at the break-even point, compute the break-even volume using weighted-average contribution margin. c. If the product sales mix were to change to four chicken tacos for each fish taco, what would be the new break-even volume?Feather Friends, Incorporated, distributes a high-quality wooden birdhouse that sells for $40 per unit. Variable expenses are $20.00 per unit, and fixed expenses total $200,000 per year. Its operating results for last year were as follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income Required: Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in dollar sales. 3. Assume this year's unit sales and total sales increase by 59,000 units and $2,360,000, respectively. If the fixed expenses do not change, how much will net operating income increase? $ 1,000,000 500,000 500,000 200,000 $ 300,000 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's unit sales to increase by 19%. Using the degree of operating leverage from last year, what percentage increase in net operating income will the…Pierson Pet Products produces two models of dog beds: Basic and Custom. Price, cost and expected sales volume data for the two models are as follows: Selling price per bed Variable cost per bed Expected sales (beds) The total fixed costs for the company are $403,200. Basic $24.00 $ 17.00 66,000 Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the expected product mix applies regardless of total sales, compute the break-even volume. c. If the product sales mix were to change to three Basic beds for each Custom bed, what would be the new break-even volume? Required A Required B Complete this question by entering your answers in the tabs below. Custom $ 59.00 $38.00 44,000 Basic beds Custom beds Required C Assuming that the expected product mix applies regardless of total sales, compute the break-even volume. Note: In your computations, round up the total units to break-even to the nearest whole number and round other intermediate…
- Cost Behavior Analysis in a Restaurant: High-Low Cost Estimation Assume a Papa John's restaurant has the following information available regarding costs at representative levels of monthly sales: Cost of food sold Wages and fringe benefits Fees paid delivery help Rent on building Depreciation on equipment Utilities Supplies (soap, floor wax, etc.) Administrative costs Total Monthly sales in units 5,000 8,000 10,000 $15,000 $24,000 $30,000 4,350 4,560 4,700 1,300 2,080 2,600 1.300 1,300 1,300 400 400 400 750 840 900 150 180 200 1.500 1.500 1,500 $24.750 $34,860 $41,600 (a) Identify each cost as being variable, fixed, or mixed. Cost of food sold Wages and fringe benefits Fees paid delivery help Rent on building Depreciation on equipment Variable # Mixed ● Variable ÷ Fixed FixedContribution Margin Ratio, Break-Even Sales Revenue, Sales Revenue for Target Profit Schylar Pharmaceuticals, Inc., plans to sell 145,000 units of antibiotic at an average price of $19 each in the coming year. Total variable costs equal $826,500. Total fixed costs equal $7,900,000. Required: 1. What is the contribution margin per unit? Round your answer to the nearest cent.$______ 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 $230,000. Round your answer to the nearest dollar. $______ 4. What if the average price per unit increased to $20.50? Recalculate the following: a. Contribution margin per unit. Round your answer to the nearest cent. $______ b. Contribution margin ratio. Enter your answer as a…Breakeven analysis (LO 1) Scott Confectionery sells its Stack-o-Choc candy bar for $0.80. The variable cost per unit for the candy bar is $0.45; total fixed costs are $175,000. What is the contribution margin per unit and the contribution margin ratio for the Stack-o-Choc candy bar? How do I fine the breakeven point in units & sales dollars?