Smith-Pelley Inc produces a single product. The results of the company's operations for a typical month are summarized in contribution format as follows: Sales Less: Variable Expenses Contribution Margin Less: Fixed Expenses Operating Income $540,000 $360,000 $180,000 $120,000 $60,000 The company produced and sold 120,000 kilograms of product during the month. There was no beginning or ending inventories. Required: a) Given the present situation, compute: 1. The break-even sales in kilograms. 2. The break-even sales in dollars. 3. The sales in kilograms that would be required to produce operating income of $90,000. 4. The margin of safety in dollars.

Smith-Pelley Inc produces a single product. The results of the company's operations for a typical month are summarized in contribution format as follows: Sales Less: Variable Expenses Contribution Margin Less: Fixed Expenses Operating Income $540,000 $360,000 $180,000 $120,000 $60,000 The company produced and sold 120,000 kilograms of product during the month. There was no beginning or ending inventories. Required: a) Given the present situation, compute: 1. The break-even sales in kilograms. 2. The break-even sales in dollars. 3. The sales in kilograms that would be required to produce operating income of $90,000. 4. The margin of safety in dollars.

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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In the last reporting period, Global Tech Company recorded 140,000 units sold for the first time in the history of the company. The price per unit was $85.63 and variable costs per unit at $35.07. Compute the contribution margin. Next, compute the fixed costs if the operating income is $3,810,000. OA. $4,909,800; $4,528,800 OB. $7,078,400; $3,268,400 OC. $4,909,800; $5,290,800 OD. $11,988,200; $11,607,200
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Lindquist Company has the following information for February: Line Item Description Amount Sales $370,000 Variable cost of goods sold 173,900 Fixed manufacturing costs 55,500 Variable selling and administrative expenses 40,700 Fixed selling and administrative expenses 22,200 Determine the following for Lindquist Company for the month of February: Line Item Description Amount a. Manufacturing margin $fill in the blank 1 b. Contribution margin $fill in the blank 2 c. Operating income $fill in the blank 3
)Smith-Pelley Inc produces a single product. The results of the company's operations for a typical month are summarized in contribution format as follows: Sales Less: Variable Expenses Contribution Margin Less: Fixed Expenses Operating Income $540,000 $360,000 $180,000 $120,000 $60,000 The company produced and sold 120,000 kilograms of product during the month. There was no beginning or ending inventories. a) Given the present situation, compute: 1. The Wreak-even sales in kilograms. 2. The break even sales in dollars. ( 3. The sales in kilograms that would be required to produce operating income of $90,000 The margin of safety in dollars b) An important part of processing is performed by a machine that is currently being leased for $20,000 per month. Smith-Pelley has been offered an arrangement whereby it would pay $0.10 royalty per kilogram processed by the machine rather than the monthly lease 1. Should the company choose the lease or the royalty plan? Show all calculations. 2.…
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Mcdale Incorporated produces and sells two products. Data concerning those products for the most recent month appear below. Product 149V Product Z500 Sales $ 14,000 Variable expenses $ 15,000 $ 3,300 $ 2,790 The fixed expenses of the entire company were $18,460. The break-even point for the entire company is closest to: Multiple Choice $23,367 $10,540 $24,550 $18,460
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Norwood Company has the following information for July: Sales $440,000 Variable cost of goods sold 198,000 Fixed manufacturing costs 70,400 Variable selling and administrative expenses 44,000 Fixed selling and administrative expenses 26,400 Determine the following for Norwood Company for the month of July: a. Manufacturing margin $fill in the blank 1 b. Contribution margin $fill in the blank 2 c. Operating income $fill in the blank 3