Sinbad manufactures decorative iron railings. In preparing for next year's operations, management has developed the following estimates: (LO# 3) Units Total Per unit Sales 20,000 1,000,000 50 Variable Expenses 600,000 30 СМ 400,000 20 Total Fixed Expenses 110,000 Operating Profit 290,000 Required: EXCEL Compute the following items: a. Unit contribution margin. b. Contribution margin ratio. c. Break-even in units and dollar sales. d. Margin of safety in dollar amount and percentage. e. If the sales volume increases by 20% with no change in total fixed expenses, what will be the change in net operating income? Verifyyour answer f. If the per unit variable production costs increase by 15%, and if fixed selling and administrative expenses increase by 12%, what will be the new break-even point in dollar sales? g. if the company would like to achieve a profit of $90,000 next year, what would be the break-even point in units and dollar amount to earn that target? h. If monthly sales increase by $80,000 and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?

Sinbad manufactures decorative iron railings. In preparing for next year's operations, management has developed the following estimates: (LO# 3) Units Total Per unit Sales 20,000 1,000,000 50 Variable Expenses 600,000 30 СМ 400,000 20 Total Fixed Expenses 110,000 Operating Profit 290,000 Required: EXCEL Compute the following items: a. Unit contribution margin. b. Contribution margin ratio. c. Break-even in units and dollar sales. d. Margin of safety in dollar amount and percentage. e. If the sales volume increases by 20% with no change in total fixed expenses, what will be the change in net operating income? Verifyyour answer f. If the per unit variable production costs increase by 15%, and if fixed selling and administrative expenses increase by 12%, what will be the new break-even point in dollar sales? g. if the company would like to achieve a profit of $90,000 next year, what would be the break-even point in units and dollar amount to earn that target? h. If monthly sales increase by $80,000 and there is no change in fixed expenses, by how much would you expect monthly net operating income to 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

Last month when Holiday Creations, Incorporated, sold 35,000 units, total sales were $140,000, total variable expenses were $109,200, 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 300 units and total sales by $1,200? Note: Do not round intermediate calculations. Answer is complete but not entirely correct. 1. Contribution margin ratio 2. Estimated change in net operating income 22 % $ 347 X
Dhapa
Need help with this question
Dhapa
In March, James Electronics had sales of $2,550,000 (25,500 units), total variable expenses of $1,275,000, and total fixed expenses of $825,000. Required: 1. What is the company's CM ratio? CM ratio % A 2. Using the CM ratio, calculate the break-even level of sales in dollars. Break-even level of sales in dollor 3. What is the break-even level of sales in units? Break-even level of sales in units units
Last month when Holiday Creations, Incorporated, sold 38,000 units, total sales were $152,000, total variable expenses were $127,680, and fixed expenses were $37,200. 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 500 units and total sales by $2,000? (Do not round intermediate calculations.) 1. Contribution margin ratio 2. Estimated change in net operating income %
s
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
Lawn Master Company, a manufacturer of riding lawn mowers, has a projected income for the coming year as follows: Sales Operating expenses: Variable expenses Fixed expenses Total expenses Operating profit $28,800,000 9,400,000 $48,000,000 1. Breakeven point in sales dollars 2. Required sales in dollars 3. Breakeven point in sales dollars 38,200,000 $ 9,800,000 Required: 1. Determine the breakeven point in sales dollars. 2. Determine the required sales in dollars to earn a before-tax profit of $13,000,000. (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) 3. What is the breakeven point in sales dollars if the variable expenses increases by 14% ? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.)
Gadubhai
Refer to the income statements in requirement 1 above. For both current operations and the proposed new operations, compute (a) the degree of operating leverage, (b) the break-even point in dollars, and (c) the margin of safety in both dollar and percentage terms.