Required information[The following information applies to the questions displayed below.]Data for Hermann Corporation are shown below:Selling priceVariable expensesContribution marginFixed expenses are $82,000 per month and the company is selling 3,500 units per month.PercentPer Unit of Sales$ 110100%7770$ 3330%2-a. Refer to the data above. How much will net operating income increase (decrease) per month if the company uses higher-qualitycomponents that increase the variable expense by $5 per unit and increase unit sales by 20%. (See below for a hint if you are havingtrouble 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 2AReq 2BRefer 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 incomebyReq 2AReq 2B>

Variable costs are costs that vary with the change in the level of output whereas fixed costs are…

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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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Contribution Margin Ratio, Variable Cost Ratio, Break-Even Sales Revenue The controller of Ashton Company prepared the following projected income statement: Sales $88,000 Total Variable cost 61,600 Contribution margin $26,400 Total Fixed cost 10,500 Operating income $15,900 Required: 1. Calculate the contribution margin ratio. % 2. Calculate the variable cost ratio. % 3. Calculate the break-even sales revenue for Ashton.$ 4. How could Ashton increase projected operating income without increasing the total sales revenue?
Whirlpool Corporation's most recent income statement is shown below: Total Per Unit Sales (10,000 units) 350,000 35.00 Variable Expenses 200,000 20.00 Contribution Margin 150,000 15.00 Fixed Expenses 135,000 Net Operating 15,000 Income Given the following independent situations, what would be the net operating income of Whirlpool Corporation if: 1. Sales Volume increases by 100 units. 2. Sales Volume decreases by 100 units. 3. Sales Volume is 9,000 units.
ni.6
Data concerning Wislocki Corporation's single product appear below: Selling price Variable expenses Contribution margin Per Unit Percent of Sales $ 150 36 100% 24% $ 114 76% Fixed expenses are $1,042,000 per month. The company is currently selling 9,700 units per month. Required: The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $12 per unit. In exchange, the sales staff would accept an overall decrease in their salaries of $104,000 per month. The marketing manager predicts that introducing this sales incentive would increase monthly sales by 330 units. What should be the overall effect on the company's monthly net operating income of this change? Change in net operating income
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Breakeven point-Algebraic and graphical Fine Leather Enterprises sells its single product for $128.88 per unit. The firm's fixed operating costs are $472,200 annually, and its variable operating costs are $86.54 per unit. a. Find the firm's operating breakeven point in units. b. Label the x axis "Sales (units)" and the y axis "Costs/Revenues ($)," and then graph the firm's sales revenue, total operating cost, and fixed operating cost functions on these axes. In addition, label the operating breakeven point and the areas of loss and profit (EBIT). a. The operating breakeven point is units. (Round to the nearest integer.)
Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Percent of Per Unit Sales $ 60 Selling price Variable expenses 100% 39 65 Contribution margin $21 35% Fixed expenses are $72,000 per month and the company is selling 4,200 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 $4 per unit and increase unit sales by 25%. 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 $4 per unit and increase unit sales by 25%. Net operating income by
Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 70 49 $ 21 Fixed expenses are $74,000 per month and the company is selling 4,400 units per month. Req 2A 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 $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% 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
Schister Systems uses the following data in its Cost-Volume-Profit analyses: Total Sales $ 325,000 Variable expenses 195,000 Contribution margin 130,000 Fixed expenses 105,000 Net operating income $ 25,000 What is total contribution margin if sales volume increases by 30%? Multiple Choice $17,500 $130,000 $32,500 $169,000
Concord Corporation recorded operating data for its auto accessories division for the year. Sales Contribution margin Total direct fixed costs Average total operating assets $750000 12.0% 38.0% 56.0% 32.0% 250000 90000 500000 How much is ROI for the year if management is able to identify a way to improve the contribution margin by $30000, assuming fixed costs are held constant?
Schister Systems uses the following data in its Cost-Volume-Profit analyses: Total Sales $380,000 Variable expenses $228,000 Contribution margin $152,000 Fixed expenses $116,000 Net operating income $36,000 What is total contribution margin if sales volume increases by 20%?
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