Silver Company's projected income statement for the month before any special order is as follows: Sales P 96,000 Less: Variable costs and expenses 62,640 Contribution margin 33,360 Less: Fixed Costs & Expenses 21,360 The company's income statement was based on an expected sale of 4,800 units. A special order offering to buy 480 units for P17 each was made to Silver Company. No additional selling expenses will be incurred if the special order is accepted. Silver's capacity can still accommodate to manufacture 480 units As a result of the special order, by how much would income increase? 1. P240 decrease 2. P1,680 increase 3. P1,896 increase 4. P2,400 increase

Silver Company's projected income statement for the month before any special order is as follows: Sales P 96,000 Less: Variable costs and expenses 62,640 Contribution margin 33,360 Less: Fixed Costs & Expenses 21,360 The company's income statement was based on an expected sale of 4,800 units. A special order offering to buy 480 units for P17 each was made to Silver Company. No additional selling expenses will be incurred if the special order is accepted. Silver's capacity can still accommodate to manufacture 480 units As a result of the special order, by how much would income increase? 1. P240 decrease 2. P1,680 increase 3. P1,896 increase 4. P2,400 increase

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

For the past year, Cline Company had fixed costs of $6,552,000, a unit variable cost of $444, and a unit selling price of $600. For the coming year, no changes are expected in revenues and costs except that a new wage contract will increase variable costs by $6 per unit. a. Determine the break-even sales (in units) for the past year.fill in the blank 1 units b. Determine the break-even sales (in units) for the coming year.fill in the blank 2 units
Dhapa
The PILLOW Co. manufactures two products, AA and BB. The following are projections for the coming month: AA BBSales P100,000 P150,000Costs: Variable 60,000 40,000 Fixed cost for the period is P45,000. 1. Compute for the total breakeven sales.2. Determine the sales requirement for each product to breakeven.
Victoria Company reports the following operating results for the month of April. VICTORIA COMPANY CVP Income Statement For the Month Ended April 30, 2020 Sales (10,000 units) Variable costs Contribution margin Fixed expenses Net income $500,000 300,000 Break-even point Break-even point $ Total Show Transcribed Text Margin of safety $ Break-even point 200,000 Management is considering the following course of action to increase net income: Reduce the selling price by 5%, with no changes to unit variable costs or fixed costs. Management is confident that this change will increase unit sales by 10%. Break-even point 140,000 Using the contribution margin technique, compute the break-even point in units and dollars and margin of safety in dollars: (Round intermediate calculations to 4 decimal places eg. 0.2522 and final answer to 0 decimal places, e.g. 2,510) (a) Assuming no changes to selling price or costs. $60,000 $ Using the contribution margin technique, compute the break-even point in…
The following is Pacific Limited’s contribution format income statement for January 2022: Sales $1,400,000 Variable expenses 700,000 Contribution margin 700,000 Fixed expenses 400,000 Net operating income $ 300,000 The company has no beginning or ending inventories and produced and sold 25,000 units during the month. Required (show your calculation): a. The company’s top management team is currently investigating how many units they need to sell to reach the break-even point. Also, they want to know how much revenue they need to generate to reach the break-even point. What do you think? d.d. Company’s Marketing Manager is confident that she can increase sales by 28% next year with some effort. What would be the expected percentage increase in net operating income? Use the degree of operating leverage concept to compute your answer
A company sells its product at P30 per unit.Unit variable cost is P22 and total fixed costs total to P100,000 per month. The company currently pays salaries of P40,000 per month but with no commission. It is considering a compensation plan whereby the sales people would receive 5% commission based on sales, but their salaries would be decreased to P25,000 per month. At what sales level is the company indifferent between the two compensation plans?
Banjo Corporation produces and sells two models of vacuum cleaners, Standard and Deluxe. Company records show the following data relating to these two products: Standard Deluxe Selling price per unit P140 P155 Variable production costs per unit P70 P110 Variable selling and admin, expense per unit P 11.50 P 18 Expected monthly sales in units 600 1,200 The company's total monthly fixed expense is P40,000. The break-even in sales pesos for the expected sales mix is P
Gayne Corporation's contribution margin ratio is 19% and its fixed monthly expenses are $50,500. If the company's sales for a month are $312,000, what is the best estimate of the company's net operating income? Assume that the fixed monthly expenses do not change. Multiple Choice $202,220 $8,780 $261,500 $59,280
Happy Tea Company’s regular selling price for a case of its product is $6. Variable costs are $4 per case. Fixed costs total $1 per case based on 100,000 cases, and remain unchanged within the relevant range of 50,000 cases to total capacity of 200,000 cases. After sales of 80,000 cases were projected for the year, a special order was received for an additional 10,000 cases. What is the minimum selling price for the special order?
Whirly Corporation's contribution format income statement for the most recent month is shown below: Sales (8,400 units) Variable expenses Contribution margin Total $ 260,400 159,600 Per Unit $ 31.00 19.00 $ 12.00 100,800 Fixed expenses Net operating income 55,300 $ 45,500 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 90 units?
H&H Bagels sells bagels in packages of six bagels. In April 2020, H&H sold 15,000 packages with a unit price of $8.80 each. H&H had $45,895 of fixed costs and calculated its breakeven volume at 6,850 packages for the month of April. What were H&H’s variable costs per unit and how much did H&H incur in total variable costs in April