Smoothit Inc is facing a problem with their 4th quarter earnings on December 25. Their earnings target is $2,500,000 and the data so far is as follows: Sales Revenue $25,000,000 ($500/unit) ($200/unit) Variable COGS $10,000,000 $10,000,000 Fixed OH Fixed SG&A $2,000,000 Variable SG&A 5% Smoothit has had a policy of having zero inventories at the end of each quarter. No further sales are possible during the year and all the units produced so far have been sold. The CEO is planning to cut the sales commission to meet the earnings target, but the accountant, Mr. Shady Helper, plans on suggesting producing items for inventory. 4.1 How much will the sales commissions have to be cut in order to meet the earnings target? 4.2 How many items need to be produced for inventory to meet the earnings target if the sales commission is left unchanged at 5%?

Smoothit Inc is facing a problem with their 4th quarter earnings on December 25. Their earnings target is $2,500,000 and the data so far is as follows: Sales Revenue $25,000,000 ($500/unit) ($200/unit) Variable COGS $10,000,000 $10,000,000 Fixed OH Fixed SG&A $2,000,000 Variable SG&A 5% Smoothit has had a policy of having zero inventories at the end of each quarter. No further sales are possible during the year and all the units produced so far have been sold. The CEO is planning to cut the sales commission to meet the earnings target, but the accountant, Mr. Shady Helper, plans on suggesting producing items for inventory. 4.1 How much will the sales commissions have to be cut in order to meet the earnings target? 4.2 How many items need to be produced for inventory to meet the earnings target if the sales commission is left unchanged at 5%?

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

Data concerning Follick Corporation's single product appear below: Selling price per unit $ 200.00 Variable expense per unit $ 72.00 Fixed expense per month $ 135,680 The break-even in monthly dollar sales is closest to: (Round your intermediate calculations to 2 decimal places.)
ats E5-14 Naylor Company had $210,000 of net income in 2013 when the selling price per unit was $150, the variable costs per unit were $90, and the fixed costs were $570,000. S. Management expects per unit data and total fixed costs to remain the same in 2014. The president of Naylor Company is under pressure from stockholders to increase net income by $52,000 in 2014. Instructions (a) Compute the number of units sold in 2013. (b) Compute the number of units that would have to be sold in 2014 to reach the stock- holders' desired profit level. (c) Assume that Naylor Company sells the same number of units in 2014 as it did in 2013. What would the selling price have to be in order to reach the stockholders' desired profit level?
Juniper Design, provides design services to residential developers. Last year, the company had net operating income of $420,000 on sales of $2,100,000. The company's average operating assets were $2,300,000 and its minimum required rate of return was 15%. Provide the missing data in the following table for a distributor of martial arts products: Note: Enter "Turnover" and "ROI" answers to 1 decimal place. Sales Net operating income Average operating assets Margin Turnover Return on investment (ROI) Alpha $ 364,000 8% 5.0 % Division Bravo $ 325,000 $52,000 % 40.0 % Charlie $66,900 15 % 30.0 %
KR Corporation's break-even-point in sales is Rs. 900,000, and its variable expenses are 75% of sales. If the company lost Rs. 32,000 last year, sales must have amounted to: _____________ (Don’t try to write any $, Rs or any alphanumeric value in the Provided answer space)
According to the Financial Department, the cost for a short waiting of a customer is $20. When there are: backorder, lost sales, lost customer, the costs are: $40, $100, S600 respectively. Y Figures calculated by the Marketing Department for the last year show the following: 1. 20% of all stock-outs result in short waiting of a customer. 2. 50% of all stock-outs result in a back order. 3. 20% of all stock-outs result in a lost order. 4. 10% of all stock-outs result in a lose of a customer. Questions: a. What is the average cost of a stock-out? b. How much should we invest in inventory to reduce the number of stock-outs from 1000 a year to only 200 per year?
Acme Company's break-even-point in sales revenue is $840,000 and its variable expense ratio is 75%. If Acme reports an operating loss of $34,000, actual sales revenue must be: $596,000 $704,000 $772,000 $806,000
13. Micky2, Inc. sells two products X and Y. Data concerning the company for July follow: Product X: sales - P200,000; variable expense - P50,000; and traceable fixed expenses - P80,000. For Product Y: sales - P300,000, variable expenses - P100,000 and traceable fixed expenses - P150,000. In addition there were common fixed expenses of P70,000 in July. What was the segment margin for Product X? P70,000 P38,000 P120,000 P150,000
Kling Inc. has only two retail and two wholesale customers. Information relating to each customer for 2020 follows: (Click the icon to view the customer-level operating income.) (Click the icon to view the data.) Kling's annual distribution-channel costs are $32,000 for wholesale customers and $13,000 for retail customers. The company's annual corporate costs are $45,000. There is no cause-and-effect or benefits-received relationship between any cost-allocation base and corporate-sustaining costs. That is, Kling could save corporate-sustaining costs only if the company completely shuts down. Requirement Prepare a customer-cost hierarchy report. First, determine the formula and then enter the amounts to calculate the total customer costs for each customer. (Abbreviations used: W. = West; E. = East; Dist. = Distribution; oper. = operating; inc. = = income.) W. Region E. Region Stock Inc. Darby Corp + + + || || Total customer-level costs
The following revenue-based profit functions are for X Company's only two products, A and B, last year: Product A: PA 0.26RA- $32,000 Product B: P0.43R- $63,000 Revenue from sales of A was $220,000, and revenue from sales of of B was $150,000. Assuming there is no change in the product mix, what must total revenue be next year in order for X Company to break even [round the weighted average contribution margin rate to two decimal places? OA: $287,879 OB: $336,818 C: $394,077 OD: $461,070 OE: $539,452 OF: $631,159
Please help me with this accounting homework question, I am having so much trouble.
ble Cosled Tissue Te 48A of 11)-Google Chrome elearn.squ.edu.o g System (Academic) XYZ Company's single product has a selling price of $15 per unit. The fixed expenses were $160,000. This year the company reported a net operating income of $100,000. If sales are predicted to increase by 10% next year, how much would the increase in profits be in ($)? of Select one: tion O a. 10,000 O b. 26,000 Oc. 16,250 Od. No change in income Oe. 6,000
mail Burn Open D) Portis, Inc. reported sales of $8,000,000 for the month and incurred variable expenses totaling $5,600,000 and fixed expenses totaling $1,440,000. The company has no beginning or ending inventories. A total of 80,000 units were produced and sold last month. (Note that this is the same data that was provided for the previous question.) What is the company's margin of safety in dollars? $480,000 A) $2,400,000 B) $3,200,000 $3,520,000 D) Page 3 of 4 50F Sunny e to search