Problem 12.24 Prepare a contribution margin format income statement; calculate breakeven LO 7, 8, 9, 11 point Presented here is the income statement for Fairchild Co. for March: Sales ......... Cost of goods sold.... Gross profit. Operating expenses.... Operating income.... $100,000 54,000 C. $ 46,000 37,000 $ 9,000 Based on an analysis of cost behavior patterns, it has been determined that the com- pany's contribution margin ratio is 30%. Required: b. a. Rearrange the preceding income statement to the contribution margin format. Calculate operating income if sales volume increases by 10%. (Note: Do not con- struct an income statement to get your answer.) Calculate the amount of revenue required for Fairchild to break even.

Problem 12.24 Prepare a contribution margin format income statement; calculate breakeven LO 7, 8, 9, 11 point Presented here is the income statement for Fairchild Co. for March: Sales ......... Cost of goods sold.... Gross profit. Operating expenses.... Operating income.... $100,000 54,000 C. $ 46,000 37,000 $ 9,000 Based on an analysis of cost behavior patterns, it has been determined that the com- pany's contribution margin ratio is 30%. Required: b. a. Rearrange the preceding income statement to the contribution margin format. Calculate operating income if sales volume increases by 10%. (Note: Do not con- struct an income statement to get your answer.) Calculate the amount of revenue required for Fairchild to break even.

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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The question 1 point possible Stancil Dry Cleaners has determined the following about its costs: Total variable expenses are $42,000, total fixed expenses are $30,000, and the sales revenue needed to break even is $50,000. Determine the company's current) revenue and 2) operating income. (Hint First, find the contribution margin ratio; then prepare the contribution margin income statement) Use the contribution margin income statement and the shortcut contribution margin approaches to determine Stancif's current (1) sales revenue and (2) operating income Begin by computing the contribution margin ratio. (inter the result as a whole number) The contribution margin ratio la Question Viewer Prepare the contribution margin income statement at the calculated sales level. Stancil Drycleaners Contribution Margin Income Statement Submit t
Question 3 The following monthly data in contribution format are available for the Timor Company and its only product. Product SD: Sales Variable expenses Contribution margin Fixed expenses Net operating income Total $ $ $ $ $ 227,500 162.500 65,000 45.000 20,000 Per Unit $ $ $ 91 65 26 The company produced and sold 2,500 units during the month and had no beginning or ending inventories. a) What is the current margin of safety? b) Management is concerned about having the funds to pay dividends next quarter. They believe net operating income of $35,000 will be sufficient. How much sales revenue is necessary to achieve this target profit?
Exercise 11-15A (Algo) Using contribution margin format income statement to measure the magnitude of operating leverage LO 11-3, 11-4 The following income statement was drawn from the records of Benson, a merchandising firm: BENSON COMPANY Income Statement For the Year Ended December 31 Sales revenue (4,500 units × $163) $ 733,500 Cost of goods sold (4,500 units × $82) (369,000 ) Gross margin 364,500 Sales commissions (5% of sales) (36,675 ) Administrative salaries expense (85,000 ) Advertising expense (34,000 ) Depreciation expense (48,000 ) Shipping and handling expenses (4,500 units × $3) (13,500 ) Net income $ 147,325 Required Reconstruct the income statement using the contribution margin format. Calculate the magnitude of operating leverage. Use the measure of operating leverage to determine the amount of net income Benson will earn if sales increase by 20 percent.
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Question 2 The following monthly data in contribution format are available for the Ross Company and its only product. Product SD: Sales Variable expenses Contribution margin Fixed expenses Net operating income Total $ $ $ $ $ 381,600 304.800 76,800 34,500 42,300 Per Unit $ 5 159 127 32 The company produced and sold 2,400 units during the month and had no beginning or ending inventories. a) What is the current operating leverage? b) Projections indicate that the market will worsen by 15% next month. What is the projected net operating income given this increase?
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05 quired information [The following information applies to the questions displayed below.] Hudson Company reports the following contribution margin income statement. Sales (9,700 units at $280 each) Variable costs (9,700 units at $210 each) Contribution margin Fixed costo Income HUDSON COMPANY Contribution Margin Income Statement. For Year Ended December 31 1. Amount of sales 2. Margin of safety $ 2,716,000 2,037,000 1. Assume Hudson has a target income of $163,000. What amount of sales (in dollars) is needed to produce this target income? 2. If Hudson achieves its target income, what is its margin of safety (in percent)? (Round your answer to 1 decimal place.) % 679,000 441,000 $ 238,000
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Exercise 18 -8 (Static) Computing missing amounts in contribution margin income statements LO A1 Compute the missing amounts in the contribution income statement shown below: (Round "Per Unit" answers to 2 decimal places.) \table[[Number of units sold, Company A, Company B], [,,,, 1,975, ], [,, otal,,unit, Total, Per unit], [Sales, $, 208, 000, $, 65.00,, ], [Variable costs,, 150, 400,,, 39, 500, ], [Contribution margin,,,,, 43, 450, ], [Fixed costs,,,,,19, 750, ], [ Income, $, 46, 400,,,,]]
Kindly answer problem number 10-12
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