Miller Company's contribution format income statement for the most recent month is shown below:Total$312,000195,000117,00042,000$ 75,000Sales (39,000 units)Variable expensesContribution marginFixed expensesNet operating incomeRequired:(Consider each case independently):1. What is the revised net operating income if unit sales increase by 20%?2. What is the revised net operating income if the selling price decreases by $1.50 per unit and the number of units sold increases by16%?13. What is the revised net operating income if the selling price increases by $1.50 per unit, fixed expenses increase by $5.000, and thenumber of units sold decreases by 6%?4. What is the revised net operating income if the selling price per unit increases by 10%, variable expenses increase by 20 cents perunit, and the number of units sold decreases by 13%Per UnitNet operating income2 Net operating income3.Net operating income4.5.00$ 3.00Net operating income

CVP stands for Cost Volume Profit analysis, under which we ascertain the effect of change in the…

Answered: Required: (Consider each case…

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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Similar questions

Weber Inc., sells its one product for $40 per unit. The variable cost per unit is $24. The fixed cost per year is $16,000a. What is the break-even point in units?b. What is the break-even point in dollars?c. If Weber would like to have $1,000 profit, how many units should be sold?d. If the selling price changes to $34 per unit, what is the new break-even point in units?
A1
1.) refer to the original data. Compute the company's margin of safety in both dollar and percentage terms ? 2.) what is the company's cm ratio? If he company can sell more units thereby increasing sales by $84000 per month and there is no change in fixed expense, by how much would you expect monthly net operating income to increase?
please answer 4a,b,c and 5 only. 4-a. What will be the new breakeven point if the additional $213,280 is spent on advertising? 4-b. Prepare a contribution income statement at the new breakeven point. 4-c. What is the percentage change in both fixed costs and in the breakeven point? 5. If the additional $213,280 is spent for advertising in the next year, what is the sales level (in units) needed to equal the current year’s operating profit at 60,000 units
2. On the basis of French's revised information, what does next year look like: a. What is the break-even point? 1,035,688 units Sales at full capacity (units) Sales volume (units) Unit sales price ($) Sales revenue ($) Variable cost per unit ($) Contribution margin per unit ($) Total variable cost ($) Fixed costs ($) Profit ($) Ratios Variable cost to sales Unit Contribution to sales Utilization of capacity (%) Break even point (units) Aggregate 2,000,000 1,750,000 6.948 12,160,000 3.385 3.56 5,925,000 3,690,000 2,545,000 0.49 0.51 87.5 1,035,688.312 A 400,000 $10 4,000,000 7.5 2.5 3,000,000 960,000 40,000 0.75 0.25 20 384,000 Product Lines B 400,000 $9 3,600,000 3.75 5.25 1,500,000 1,560,000 540,000 0.42 0.58 20 297,143 C 950,000 $4.80 4,560,000 1.5 3.3 1,425,000 1,170,000 1965000 0.31 0.69 47.5 354,545
1-Due to an increase in labor rates, the company estimates that variable expenses will increase by $3 per ball next year. If this change takes place and the selling price per ball remains constant at $25, what will be the new CM ratio and break-even point in balls? 2. Refer to the data in (2) above. If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating income, $90,000, as last year? 3. Refer again to the data in (2) above. The president feels that the company must raise the selling price of its basketballs. If Northwood Company wants to maintain the same CM ratio as last year, what selling price per ball must it charge next year to cover the increased labor costs?
Assume the following information: Amount Per Unit Sales $ 600,000 $ 40 Contribution margin $ 360,000 $ 24 Net operating income $ 240,000 If the selling price per unit increases by 8% and unit sales drop by 6%, then the best of estimate of the new net operating income is: Multiple Choice $263,520. $243,520. $253,520. $233,520.
3) If demand for 2022 is instead 2,500 units should the company pay to increase their capacity? Why? Please explain your calculations and reference to the chart in Figure 1. Assume units are sold at the normal price. Please mention the concept of incremental profits. Hint: If you expand capacity, you will have to pay additional fixed costs of $25,000. Remember that fixed costs are fixed within the relevant range. If you expand capacity then you are outside this range. If you expand capacity then you can make revenue on 500 additional units at the normal price and would pay variable costs on 500 additional units. Please consider the incremental profit or loss of expanding capacity. The incremental profit is the increase in revenues minus the increase in costs of adding 500 more units. If the incremental profit of expanding capacity is positive then you should do so.
e. 5,000 XYZ company is studying the profitability of a change in operation and has gathered the following information. Current Operation: Fixed Costs: $38,000, Selling Price: $16, Variable Cost: $10, and Sales (Units): 9,000. Anticipated Operation: Fixed Costs: $48,000, Selling Price: $22, Variable Cost: $12, and Sales (Units): 6,000. Should XYZ company make the change? Select one: O a. No, because sales will drop by 3,000 units. Ob. It is impossible to judge because additional information is needed. Oc. No, because the company will be worse off by $4,000. O d. Yes, the company will be better off by $6,000. Oe. No, because the company will be worse off by $22000. Next page
A company wants to expand by offering a new product. Expected cost and revenue data for this product are: Annual sales 5,000 units Unit selling price ? Unit variable costs: Production $ 30.20 Selling 6. Incremental fixed costs per year: 32:16 Production $35,000 Selling $45,000 If the company adds this new product, sales of its other product lines will be impacted, causing the contribution margin of other product lines to drop by $18,500 per year. What is the lowest price the company could charge for its new product without affecting the company's total profits? Multiple Choice $39.90 $52.20
Accounting Question
Required information [The following information applies to the questions displayed below.] Henna Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 46,000 units of each product. Sales and costs for each product follow. Product T Product 0 $ 800,400 640, 320 160,080 32,080 128,000 44,800 Sales $ 800,400 Variable costs 160,080 Contribution margin 640,320 512,320 Fixed costs 128,000 44,800 $ 83,200 Income before taxes Income taxes (35% rate) Net income $ 83, 200

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