Richland Enterprises has budgeted the following amounts for its next fiscal year:Total fixed expenses$47,000$65Selling price per unitVariable expenses per unit$40If Richland Enterprises can reduce fixed expenses by $11,325, how will breakeven sales in units be affected?O A. Increase by 108 unitsB. Increase by 453 unitsO C.Decrease by 453 unitsD. Decrease by 108 units

Compute contribution margin per unit as shown below:

Answered: Richland Enterprises has budgeted the…

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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Dixie Co. Budgeting Income Statement Sales Cost of Goods Sold Gross Profit Selling & Admin Operating Income $ 600,000 $ 360,000 $ 240,000 $ 200,000 $ 40,000 Dixie Co. is budgeting for next year. Their initial budget is shown above and is based on 10,000 units. Product costs are 55% variable. Selling and Admin costs are 30% variable. If they wish to budget for 16,000 units, what would the new budgeted profit be? Enter as a whole number, no commas and no dollar signs. Answer:
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Data concerning Lancaster Corporation's single product appear below: Per Unit Percent of Sales Selling Price $200 100% Variable Expenses $60 30% Contribution Margin $140 70% Fixed expenses are $105,000 per month. The company is currently selling 1,000 units per month. Management is considering using a new component that would increase the unit variable cost by $44. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 400 units. What should be the overall effect on the company's monthly net operating income of this change? A. Decrease of $38,400 B. Decrease of $5,600 C. Increase of $38,400 D. Increase of $5,600 2.
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Violet Sales Corp, reports the year-end information from 2023 as follows: Sales (35,500 units) $284,000 Cost of goods sold 105,000 Gross margin 179,000 Operating expenses 152,000 Operating income $27,000 Violet is developing the 2024 budget. In 2024 the company would like to increase selling prices by 3.5%, and as a result expects a decrease in sales volume of 14%. All other operating expenses are expected to remain constant. Assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost. What is budgeted sales for 2024?
Break-Even in Sales Revenue, Variable-Costing Ratio, Contribution Margin Ratio, Margin of Safety Hammond Company runs a driving range and golf shop. The budgeted income statement for the coming year is as follows. Sales $1,240,000 Less: Variable expenses 706,800 Contribution margin $533,200 Less: Fixed expenses 425,000 Income before taxes $108,200 Less: Income taxes 43,280 Net income $64,920 1. What is Hammond’s variable cost ratio? Enter your answer as a decimal value rounded to two decimal places. What is the contribution margin ratio? Enter your answer as a decimal value rounded to two decimal places. (Express as a decimal-based amount rather than a whole percent.)f 2. Suppose Hammond’s actual revenues are $200,000 greater than budgeted. By how much will before-tax profits increase? Calculate the answer without preparing a new income statement. 3. How much sales revenue must Hammond earn in order to break even? Round your answer to the nearest dollar. What…
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