Ronald Medical Supply is a retailer of home medical equipment. Last year, Ronald's sales revenues totaled $6,100,000. Total expenses were $2,590,000. Of this amount, approximately $1,342,000 were variable,while the remainder were fixed. Since Ronald's offers thousands of different products, its managers prefer to calculate the breakeven point in terms of sales dollars rather than units.Read the requirements.Requirement 1. What is Ronald's current operating income?Begin by identifying the formula to compute the operating income.RequirementsGOperating incomePrint1. What is Ronald's current operating income?2. What is Ronald's contribution margin ratio?3. What is the company's breakeven point in sales dollars? (Hint: The contributionmargin ratio calculated in Requirement 2 is already weighted by the company'sactual sales mix.)- X4. Ronald's top management is deciding whether to embark on a $230,000advertising campaign. The marketing firm has projected annual sales volume toincrease by 20% as a result of this campaign. Assuming that the projectionsare correct, what effect would this advertising campaign have on the company'sannual operating income?Done

Break even point is the optimum point of No profit no loss as at this point the firm is earning zero…

Answered: Ronald Medical Supply is a retailer of…

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 18E

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Ullie Medical Supply is a retailer of home medical equipment. Last year, Ullie's sales revenues totaled $6,600,000. Total expenses were $2,300,000. Of this amount, approximately $1,320,000 were variable, while the remainder were fixed. Since Ullie's offers thousands of different products, its managers prefer to calculate the breakeven point in terms of sales dollars rather than units. 4.(PLEASE SOLVE THIS QUESTION) Ullie's top management is deciding whether to embark on a $180,000 advertising campaign. The marketing firm has projected annual sales volume to increase by 18% as a result of this campaign. Assuming that the projections are correct, what effect would this advertising campaign have on the company's annual operating income? What effect would this advertising campaign have on Ullie's annual operating income? The effect would be (INCREASE/DECREASE) operating income of
i only need the breakeven point in req.3 please.
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Please answer the three questions below. Thanks! 1) Gilley, Inc., sells a single product. The company's most recent income statement is given below. Sales (4,000 units)- Variable Expenses Contribution Margin- Fixed ExpensesOperating Income $ 120,000(68,000)$ 52,000(42,000)$ 10,000 If 10 more units are sold, profits will increase by: 2) Using the information from Gilley, Inc. above, answer the following. The marketing manager believes that sales may increase next year by 20%. Using the operating leverage and the predicted increase in sales, what will TOTAL operating income be next year if the marketing manager is correct? 3) Using the information from Gilley, Inc. above, answer the following. The CEO of Gilley believes that sales will increase to 5,000 units next year and thinks that this may be a good time to lower variable cost and increase fixed costs through some minor automation in the plant. If they go ahead with this plan, variable costs per unit will…
Flair ranks the individual customers in the Ma and Pa single-store distribution market on the basis of monthly operating income. The cumulative operating income of the top 20% of customers is $58,120. Best Drugs reports operating losses of $23,670 for the bottom 40% of its customers. Make four recommendations that you think Best Drugs should consider in light of this new customer-profitability information.
Windows is a small company that installs windows. Its cost structure is as follows: LOADING... (Click the icon to view the cost structure.) Traylor Windows' breakeven revenues is $1,870,000 and breakeven units is 3,400. Calculate the margin of safety in units and dollars and the margin of safety percentage if Traylor Windows expects to sell 3,600 windows in the year. Begin with calculating the margin of safety in dollars. Determine the formula to calculate the margin of safety in dollars. Then, enter the amounts and calculate the margin of safety in dollars. Budgeted revenue - Breakeven revenue = Margin of safety in dollars - = Next, determine the formula, enter the amounts, and calculate the margin of safety in units. Budgeted units - Breakeven units = Margin of safety in units - = Finally, calculate the margin of safety percentage if…
Need step by step explanation.Mauro Products distributes a single product, a woven basket whose selling price is $14 per unit and whose variable expense is $12 per unit. The company’s monthly fixed expense is $4,600. Required: Calculate the company’s break-even point in unit sales. Calculate the company’s break-even point in dollar sales. (Do not round intermediate calculations.) If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? (Do not round intermediate calculations.)
Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) Total $ 4,180,000 1,248,000 2,932,000 2,180,000 $ 752,000 Answer is complete but not entirely correct. $ (52,100) Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department? Financial (disadvantage) Department Hardware $ 3,100,000 830,000 2,270,000 1,380,000 $ 890,000 A study indicates that $378,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 12% decrease in the sales of the Hardware Department. Linens $ 1,080,000 418,000 662,000 800,000 $ (138,000)
How can I resolve this problem Mauro Products distributes a single product, a woven basket whose selling price is $12 per unit and whose variable expense is $9 per unit. The company’s monthly fixed expense is $7,800. Required: 1. Calculate the company’s break-even point in unit sales. 2. Calculate the company’s break-even point in dollar sales. (Do not round intermediate calculations.) 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales?
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Recalculate the customer-level operating income using the number of written orders but at their actual $8 cost per order instead of $15 (except for DC, whose actual cost is $15 per order). How will KC Corporation evaluate customer-level operating cost performance this period?
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