Problem 5-4&5 The Lucas Inn has room and food operations. The rooms operation provides 65 percent of the total revenue and has variable costs of 25 percent. The food operation provides 35 percent of the total revenue and has variable costs of 60 percent. The total annual fixed costs are $300,000. 4. What is the breakeven point? (use 2 decimal places for dollars and cents) 478087.65 5. Revenue required for $100,000 profit with 20% tax rate. (use 2 decimal places for dollars and cents) 677290.84

Problem 5-4&5 The Lucas Inn has room and food operations. The rooms operation provides 65 percent of the total revenue and has variable costs of 25 percent. The food operation provides 35 percent of the total revenue and has variable costs of 60 percent. The total annual fixed costs are $300,000. 4. What is the breakeven point? (use 2 decimal places for dollars and cents) 478087.65 5. Revenue required for $100,000 profit with 20% tax rate. (use 2 decimal places for dollars and cents) 677290.84

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Example 5 Brilliant Travel Agency specializes in flights between Toronto and Jamaica. It books passengers on Ontario Air. Brilliant's fixed costs are $36,000 per month. Ontario Air charges passengers $1,300 per round-trip ticket. Required: Under each of the following independent situation. Calculate the number of tickets Brilliant must sell each month to (a) break even and (b) make a target operating income of $12,000 per month 1.Brilliant's variable costs are $34 per ticket. Ontario Air pays Brilliant 10% commission on ticket price. 2.Brilliant's variable costs are $30 per ticket. Ontario Air pays Brilliant 10% commission on ticket price. 3.Brilliant's variable costs are $30 per ticket. Ontario Air pays $46 fixed commission per ticket to Brilliant. Comment on the results. 4.Brilliant's variable costs are $30 per ticket. It receives $46 commission per ticket from Ontario Air. It charges its customers a delivery fee of $8 per ticket. Comment on the results. Solutions:
3-27 CVP analysis, income taxes. The Home Style Eats has two restaurants that are open 24 hours aday. Fixed costs for the two restaurants together total $430,500 per year. Service varies from a cup of coffeeto full meals. The average sales check per customer is $8.75. The average cost of food and other variablecosts for each customer is $3.50. The income tax rate is 36%. Target net income is $117,600.1. Compute the revenues needed to earn the target net income.2. How many customers are needed to break even? To earn net income of $117,600?3. Compute net income if the number of customers is 170,000.
Yu 28.
4
Homework Saved Help Stuart Company makes a product that sells for $33 per unit. The company pays $13 per unit for the variable costs of the product and incurs annual fixed costs of $184,000. Stuart expects to sell 22,200 units of product. Required Determine Stuart's margin of safety expressed as a percentage. (Round your percentage answers to 2 decimal places (i.e., 0.2345 should be entered as 23.45).) Margin of safety
QUESTION 8 Grass is Greener, Inc., plans to charge its customers by the hour and to work 350 hours at $16 per hour. It expects its variable costs to be $6 per hour and fixed costs to be $600. Calculate the number of hours needed to earn $1,800 in operating income? (Round to the nearest hour)
Question 4 Ali Limited produces and sells two products. Product A sells for £12 per unit and has a total variable cost of £7.90, while Product B sells for £17 per unit and has a total variable cost of £11.20. For every 4 units of Product A sold, three of product B are sold. Ali Limited fixed costs are £131,850. Budgeted sales revenue is £428,500. Required: a) b) b) Calculate the Break-Even points in Units. Calculate the Margin of Safety in Units. Evaluate the relevance of Break-Even Analysis in decision making process.
QUESTION 3 E22.11 E22.11 (LO 3, 4) near a medical çenter and an international airport. Spencer Kars uses two 10- passenger vans to offer 12 round trips per day. A recent month's activity in the form of a cost-volume-profit income statement is shown below. Compute break-even point. Sales (1,500 passengers) Spencer Kars provides shuttle service between four hotels $36,000 Variable costs Fuel $ 5,040 Tolls and parking 3,100 Maintenance 860 9,000 Contribution margin 27,000 Fixed costs Salaries 15,700 Depreciation Insurance 1,300 1,000 18,000 Net income $ 9,000 Instructions a. Calculate the break-even point in (1) dollars and (2) number of passengers. b. Without calculations, determine the contribution margin at the break-even point.
ces Exercise 2-17 (Algo) Break-Even and Target Profit Analysis [LO2-4, LO2-5, LO2-6] Outback Outfitters sells recreational equipment. One of the company's products, a small camp stove, sells for $120 per unit. Variable expenses are $84 per stove, and fixed expenses associated with the stove total $162,000 per month. Required: 1. What is the break-even point in unit sales and in dollar sales? 2. If the variable expenses per stove increase as a percentage of the selling price, will it result in a higher or a lower break-even point? (Assume that the fixed expenses remain unchanged.) 3. At present, the company is selling 15,000 stoves per month. The sales manager is convinced that a 10% reduction in the selling price would result in a 25% increase in monthly sales of stoves. Prepare two contribution format income statements, one under present operating conditions, and one as operations would appear after the proposed changes. 4. Refer to the data in Required 3. How many stoves would have…
Question 5A .
Problem 5 - 19 (Algo) Break - Even Analysis; Pricing [LO5 - 1, LO5 - 4, LO5-5] Last year Anthony Fauci Ltd. introduced a new product and sold 25, 300 units of it at a price of $94 per unit. The product's variable expenses are $64 per unit and its fixed expenses are $837,300 per year. Required: 1. What was this product's net operating income (loss) last year? 2. What is the product's break - even point in unit sales and dollar sales? 3. Assume the company has conducted a marketing study that estimates it can increase annual sales of this product by 5,000 units for each $2 reduction in its selling price. If the company will only consider price reductions in increments of $2 (e.g., $68, $66, etc.), what is the maximum annual profit that it can earn on this product? What sales volume and selling price per unit generate the maximum profit? 4. What would be the break - even point in unit sales and in dollar sales using the selling price that you determined in requirement 3?
3