Required Information[The following information applies to the questions displayed below.]Data for Hermann Corporation are shown below:PercentPer Unit of sales$95100%5760$3840%selling pricevariable expensesContribution marginFixed expenses are $79,000 per month and the company is selling 3,600 units per month.2-a. Refer to the original data. How much will net operating Income Increase (decrease) per month if the company uses higher-qualitycomponents that increase the variable expense by $3 per unit and increase unit sales by 10%.2-b. Should the higher-quality components be used?Complete this question by entering your answers in the tabs below.Req 2AReq 28Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $3 per unit and increase unit sales by 10%.Net operating incomeby

Variable cost is the cost that remains the same on a per-unit basis but changes in totality whereas…

Require formation [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Per Unit $95 57 $ 38 Percent of Sales 100% 60 40% Selling price variable expenses Contribution margin Fixed expenses are $79,000 per month and the company is selling 3,600 units per month. Refer to the original data. How much will net operating Income Increase (decrease) per month if the company uses higher-quality ponents that increase the variable expense by $3 per unit and increase unit sales by 10%. Should the higher-quality components be used?

Require formation [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Per Unit $95 57 $ 38 Percent of Sales 100% 60 40% Selling price variable expenses Contribution margin Fixed expenses are $79,000 per month and the company is selling 3,600 units per month. Refer to the original data. How much will net operating Income Increase (decrease) per month if the company uses higher-quality ponents that increase the variable expense by $3 per unit and increase unit sales by 10%. Should the higher-quality components be used?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 47E: Klamath Company produces a single product. The projected income statement for the coming year is as...

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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?
Wallace Industries has total contribution margin of $58,560 and net income of $24,400 for the month of April. Wallace expects sales volume to increase by 5% in May. What are the degree of operating leverage and the expected percent change in income for Wallace Industries? 0.42 and 2.2% 0.42and5% 2.4andl2% 2.Sandl3%
Using the information in the previous exercises about Marleys Manufacturing, determine the operating income for department B, assuming department A sold department B 1,000 units during the month and department A reduces the selling price to the market price.
Klamath Company produces a single product. The projected income statement for the coming year is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. 2. Suppose 10,000 units are sold above break-even. What is the operating income? 3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue. (Note: Round the contribution margin ratio to four decimal places, and round the sales revenue to the nearest dollar.) Suppose that revenues are 200,000 more than expected for the coming year. What would the total operating income be?
Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Fixed expenses are $74,000 per month and the company is selling 4,400 units per month. Req 2A Per Unit $ 70 49 $ 21 2-a. Refer to the original data. How much will net operating income increase (decrease) per month if the co pany uses higher-quality components that increase the variable expense by $4 per unit and increase unit sales by 25%. 2-b. Should the higher-quality components be used? Req 2B Percent of Sales Complete this question by entering your answers in the tabs below. 100% 70 30% increases by Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher- quality components that increase the variable expense by $4 per unit and increase unit sales by 25%. Net operating income
Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Fixed expenses are $87,000 per month and the company is selling 2,900 units per month. Percent Per Unit of Sales $135 81 100% 60 $ 54 40% 2-a. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $5 per unit and increase unit sales by 20%. 2-b. Should the higher-quality components be used? Complete this question by entering your answers in the tabs below. Req 2A Req 2B Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher- quality components that increase the variable expense by $5 per unit and increase unit sales by 20%. Net operating income by
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Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Percent of Per Unit Sales Selling price Variable expenses $ 135 100% 81 60 Contribution margin $ 54 40% Fixed expenses are $87,00h per month and the company is selling 2,900 units per month. 2-a. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $5 per unit and increase unit sales by 20%. 2-b. Should the higher-quality components be used? Complete this question by entering your answers in the tabs below. ch 近

Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Fixed expenses are $82,000 per month and the company is selling 3,500 units per month. Percent Per Unit of Sales $ 110 100% 77 70 $ 33 30% 2-a. Refer to the data above. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $5 per unit and increase unit sales by 20%. (See below for a hint if you are having trouble getting to the right answer.) 2-b. Should the higher-quality components be used? Complete this question by entering your answers in the tabs below. Req 2A Req 2B Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher- quality components that increase the variable expense by $5 per unit and increase unit sales by 20%. Net operating…
A company sells one product and its contribution margin ratio is 20%. The company provides the following data regarding their operation: Current sales revenue Expected sales revenue next year Expected increase in net operating income next year $2,760,000 $2,870,400 20% Assuming that there is no change in total fixed expenses, what is the net operating income for the current year? Answer: $(Click to select)
The following information is extracted from the income statement of Al Shams Private Ltd. The Price (P) per unit of product is OMR 12 and Variable cost (VC) per unit is OMR 7 and fixed operating cost is OMR 8,000.Answer the following question after analyzing the given table. YEAR 1 YEAR 2 Sales (in units) 5,000 9,500 Sales Revenue (in OMR) ? ? Less: Variable operating costs ? ? Less: Fixed operating costs 8,000 ? Earnings before interest and taxes (EBIT) ? ? Complete the table Calculate the Degree of Operating Leverage (DOL). Interpret your answer (DOL).
[The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Fixed expenses are $85,000 per month and the company is selling 2,700 units per month. Req 2A Per Unit 125 80 $45 2-a. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $5 per unit and increase unit sales by 20%. 2-b. Should the higher-quality components be used? Req 2B Complete this question by entering your answers in the tabs below. Percent of Sales Net operating income 100% 64 36% by Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher- quality components that increase the variable expense by $5 per unit and increase unit sales by 20%. Req 2A Req 2B >