Shelhorse Corporation produces and sells a single product. Data concerning that product appear below:Selling priceVariable expensesContribution marginPer Unit$ 19076$ 114Percent ofSales100%40%60%Fixed expenses are $343,000 per month. The company is currently selling 3,800 units per month.Required:The marketing manager believes that a $12,000 increase in the monthly advertising budget would result in a 120 unit increase inmonthly sales. What should be the overall effect on the company's monthly net operating income of this change?Change in net operating income+

Income statement is one of the financial statements that shows profitability, total revenue and…

Answered: Shelhorse Corporation produces and…

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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Milden Company is a distributor who wants to start using a contribution format income statement for planning purposes. The company has analyzed its expenses and developed the following cost formulas: Cost Cost Formula Cost of good sold $31 per unit sold Advertising expense $187,000 per quarter Sales commissions 7% of sales Shipping expense? Administrative salaries $97,000 per quarter Insurance expense $10,700 per quarter Depreciation expense $67,000 per quarter Because shipping expense is a mixed cost, the company needs to estimate the variable shipping expense per unit sold and the fixed shipping expense per quarter using the following data: Shipping Expense Year 1: First 33,000 $177,000 Second 35,000 $ 192,000 Third 40,000 $234,000 Fourth 36,000 $ 197,000 Year 2: First 34,000 $ 187,000 Second 37,000 $ 202,000 Third 48,750 $ 240,000 Fourth 45,750 $ 216,000 Required: 1. Using the high- low method, estimate a cost formula for shipping expense in the form Y = a + bX. 2. In the first…
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Searchlight, Inc. uses ROI to evaluate operations and requires the return on its operating units to be 9%. Operating data for the Western division is shown below: Sales $1,000,000 Controllable margin 120,000 Total average assets 600,000 Fixed costs 60,000 How much is ROI for the year? A. 20% B. 17% C. 10% D. 30%
Jaybird Company operates in a highly competitive market where the market price for its product is $145 per unit. Jaybird desires a 30% profit per unit. Jaybird expects to sell 5,000 units. Additional information is as follows: Variable Costs per Unit Fixed Costs (total) Direct materials S 24 Overhead $ 45,000 Direct labor 25 General and administrative 18,000 Overhead 23 General and administrative 29 To achieve the target cost per unit, Jaybird must reduce total expenses by how much? Multiple Choice $ 62,000 $51,000 $70, 500 $67,500 $60, 500
Last month when Holiday Creations, Incorporated, sold 41,000 units, total sales were $164,000, total variable expenses were $116,440, and fixed expenses were $38,600. Required: 1. What is the company's contribution margin (CM) ratio? 2. What is the estimated change in the company's net operating income if it can increase sales volume by 600 units and total sales by $2,400? (Do not round intermediate calculations.)
I need help with parts 1 and 2
A furniture manufacturer specializes in wood tables. The tables sell for $220 per unit and incur $110 per unit in variable costs. The company has $17,575 in fixed costs per month. Calculate the breakeven point in units under each independent scenario. 14. Variable costs increase by $15 per unit. 15. Fixed costs decrease by $525. 16. Sales price increases by 20%. Begin by selecting the formula labels. Then enter the amounts to compute the number of wood tables the company must sell to break even under each independent scenario, beginning with scenario 14. (Abbreviation used: CM = contribution margin. Complete all input fields. For items with a zero value, enter "0". Round the breakeven point-the required sales in units-up to the nearest whole unit. For example, 10.25 would be rounded to 11.) = Required sales in units 14. ( 15. ( 16. ( + + + ) ÷ ) ÷ ) = ) ÷ = = -C =
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Fresh Co. is a company that produces fruit juices. Variable Manufacturing Costs of one package of juice = $0.6, Variable Marketing and Administrative Cost = $0.4, Fixed Costs = $12,000, Sales Price per unit is $4. Which of the following is Fresh Co.’s Target Volume (in Sales dollars)? a) $12,000 b) $13,320 c)$16,000 d) $14,120
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