Question No. 9Sonia Enterprises, Inc. has the capacity to produce 12,000 units per year.Expected operations for the year are:Sales (10,000 units @ $20) $200,000Manufacturing expenses:Variable$8 per unitFixed$40,000Marketing expenses:Variable$3 per unitFixed$20,000What is the expected level of operating profits?

Explanation of Production Capacity: Production capacity refers to the maximum number of units a…

Answered: Question No. 9 Sonia Enterprises, Inc.…

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter4A: Nopat Breakeven: Revenues Needed To Cover Total Operating Costs

Section: Chapter Questions

Problem 1EP

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Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?
Beckham Company has the following information available: Selling price per unit: Variable cost per unit: Fixed costs per year: £400,000 Expected sales per year: 20,000 units What is the expected operating income (i.e. profit) for a year? Select one: O A. £500,000 O B. O C. £700,000 £680,000 £100 £55 O D. £480,000
Slosh Cleaning Corporation services both residential and commercial customers. Slosh expects the following operating results next year for each type of customer: Residential Commercial Sales P60,000 P140,000Contribution margin ratio 50% 30% Slosh expects to have P50,000 in fixed expenses next year. What would Slosh's peso sales revenues from Commercial customers have to be next year in order to generate a profit of P166,000?
The costs and revenue projections for a new product are estimated. What is the estimated profit at a production rate of 20% above breakeven? Fixed cost = $668,000 per year Production cost per unit = $191.0 Revenue per unit = $286.0 The estimated profit is determined to be $ per year.
2. A firm has the capacity to produce 1,000,000 units of a product per year. At present, it is able to produce and sell 600,000 units yearly at a total income of P720,000.00. Annual fixed costs are P250,000 and the variable costs per unit is P0.70. a. Give the firm's annual profit or loss for this production. b. Give the number of units that should be sold annually to break even
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2) Milton Company's projected profit for the coming year is as follows: Description Total Per Unit Sales $ 200,000.00 $ 20.00 less: Variable expenses $ 120,000.00 $ 12.00 Contribution margin $ 80,000.00 $ 8.00 Less fixed expenses $ 64,000.00 Operating income $ 16,000.00 Required: C)Suppose Milton would like to earn operating income equal to 20 percent of sales revenue. How many units must be sold for this goal to be realized? D) For the projected level of sales, compute the margin of safety.
Financial Accounting
Be sure your inputs are set to the following: Plant Cost $4,000,000 year 0 Sales (units) 80,000 year 1 Selling Price $25 each Sales Growth per year Variable Costs 40% of revenu SG&A 50% of revenue SG&A Declines 2% per year Depreciation 5 years, straight-line Tax Rate 35% What is the Sales Growth percentage that results in total net income closest to 0? Report your answer to the nearest 0.1% with no extra words or punctuation. Examples of Correct Answers: 22.3% 22.3 Answer: Change your inputs to the following: Plant Cost $3,000,000 year 0 Salor fumital
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