SUBJECT - ACCOUNT Whirpool is considering selling deluxe refrigerators for residential use. Projected financial information related to this project follows (this is the base case): Selling price $3,000 per unit Variable costs $1,000 per unit Fixed costs $6,000,000 for the period Projected sales 6,500 units (BUDGETED UNITS) 1. What is the break-even point in sales dollars and units? 2. What is the projected margin of safety in dollars and units? 3. How many refrigerators must be sold to earn a profit of $2,000,000? 4. Calculate operating profit using the information from the base case.

SUBJECT - ACCOUNT Whirpool is considering selling deluxe refrigerators for residential use. Projected financial information related to this project follows (this is the base case): Selling price $3,000 per unit Variable costs $1,000 per unit Fixed costs $6,000,000 for the period Projected sales 6,500 units (BUDGETED UNITS) 1. What is the break-even point in sales dollars and units? 2. What is the projected margin of safety in dollars and units? 3. How many refrigerators must be sold to earn a profit of $2,000,000? 4. Calculate operating profit using the information from the base case.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 34P: Hammond Company runs a driving range and golf shop. The budgeted income statement for the coming...

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Hammond Company runs a driving range and golf shop. The budgeted income statement for the coming year is as follows. Required: 1. What is Hammonds variable cost ratio? Its contribution margin ratio? 2. Suppose Hammonds actual revenues are 200,000 greater than budgeted. By how much will before-tax profits increase? Give the answer without preparing a new income statement. 3. How much sales revenue must Hammond earn in order to break even? What is the expected margin of safety? (Round your answers to the nearest dollar.) 4. How much sales revenue must Hammond generate to earn a before-tax profit of 130,000? An after-tax profit of 90,000? (Round your answers to the nearest dollar.) Prepare a contribution margin income statement to verify the accuracy of your last answer.
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Please provide this question solution general finance....
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