Homework Help is Here – Start Your Trial Now!
Business
Accounting
Sunland Candy Company is a wholesale distributor of candy. The company services grocers, convenience stores, and drugstores in a large metropolitan area. Sunland Candy Company has achieved small but steady growth in sales over the past few years, but costs have also been increasing. The company is formulating its plans for the coming fiscal year. The following data were used to project the current year's after-tax operating income of $213,312: Average selling price Average variable costs Cost of candy Selling expenses Total Annual fixed costs Selling Administrative Total $8.00 per box $4.00 per box 0.80 per box $4.80 per box $300,800 631,600 $932,400 The expected annual sales volume (733,200 boxes) is $5,865,600 and the tax rate is 40%. Candy manufacturers have announced that they will increase the prices of their products by an average of 15% in the coming year because of increases in raw material (sugar, cocoa, peanuts, and so on) and labour costs. Sunland Candy Company expects that all other costs will remain at the same rates or levels as during the current year. (c) * Your answer is incorrect. Calculate the volume of sales in dollars that Sunland Candy Company must achieve in the coming year to keep the same operating income after taxes that was projected for the current year if the selling price of candy remains at $8.00 per box and the cost of candy increases by 15%. (Round contribution margin ratio to 2 decimal places, e.g. 15.25% and final answer to 0 decimal places, e.g. 125.) Volume of sales to be maintained $ 4,759,138

Sunland Candy Company is a wholesale distributor of candy. The company services grocers, convenience stores, and drugstores in a large metropolitan area. Sunland Candy Company has achieved small but steady growth in sales over the past few years, but costs have also been increasing. The company is formulating its plans for the coming fiscal year. The following data were used to project the current year's after-tax operating income of $213,312: Average selling price Average variable costs Cost of candy Selling expenses Total Annual fixed costs Selling Administrative Total $8.00 per box $4.00 per box 0.80 per box $4.80 per box $300,800 631,600 $932,400 The expected annual sales volume (733,200 boxes) is $5,865,600 and the tax rate is 40%. Candy manufacturers have announced that they will increase the prices of their products by an average of 15% in the coming year because of increases in raw material (sugar, cocoa, peanuts, and so on) and labour costs. Sunland Candy Company expects that all other costs will remain at the same rates or levels as during the current year. (c) * Your answer is incorrect. Calculate the volume of sales in dollars that Sunland Candy Company must achieve in the coming year to keep the same operating income after taxes that was projected for the current year if the selling price of candy remains at $8.00 per box and the cost of candy increases by 15%. (Round contribution margin ratio to 2 decimal places, e.g. 15.25% and final answer to 0 decimal places, e.g. 125.) Volume of sales to be maintained $ 4,759,138

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
Sunland Candy Company is a wholesale distributor of candy. The company services grocers, convenience stores, and drugstores in a large metropolitan area. Sunland Candy Company has achieved small but steady growth in sales over the past few years, but costs have also been increasing. The company is formulating its plans for the coming fiscal year. The following data were used to project the current year's after-tax operating income of $213,312: Average selling price Average variable costs Cost of candy Selling expenses Total Annual fixed costs Selling Administrative Total (c) $8.00 per box $4.00 per box 0.80 per box $4.80 per box $300,800 631,600 $932,400 The expected annual sales volume (733,200 boxes) is $5,865,600 and the tax rate is 40%. Candy manufacturers have announced that they will increase the prices of their products by an average of 15% in the coming year because of increases in raw material (sugar, cocoa, peanuts, and so on) and labour costs. Sunland Candy Company expects that all other costs will remain at the same rates or levels as during the current year. * Your answer is incorrect. Calculate the volume of sales in dollars that Sunland Candy Company must achieve in the coming year to keep the same operating income after taxes that was projected for the current year if the selling price of candy remains at $8.00 per box and the cost of candy increases by 15%. (Round contribution margin ratio to 2 decimal places, e.g. 15.25% and final answer to 0 decimal places, e.g. 125.) Volume of sales to be maintained $ 4,759,138
Transcribed Image Text:Sunland Candy Company is a wholesale distributor of candy. The company services grocers, convenience stores, and drugstores in a large metropolitan area. Sunland Candy Company has achieved small but steady growth in sales over the past few years, but costs have also been increasing. The company is formulating its plans for the coming fiscal year. The following data were used to project the current year's after-tax operating income of $213,312: Average selling price Average variable costs Cost of candy Selling expenses Total Annual fixed costs Selling Administrative Total (c) $8.00 per box $4.00 per box 0.80 per box $4.80 per box $300,800 631,600 $932,400 The expected annual sales volume (733,200 boxes) is $5,865,600 and the tax rate is 40%. Candy manufacturers have announced that they will increase the prices of their products by an average of 15% in the coming year because of increases in raw material (sugar, cocoa, peanuts, and so on) and labour costs. Sunland Candy Company expects that all other costs will remain at the same rates or levels as during the current year. * Your answer is incorrect. Calculate the volume of sales in dollars that Sunland Candy Company must achieve in the coming year to keep the same operating income after taxes that was projected for the current year if the selling price of candy remains at $8.00 per box and the cost of candy increases by 15%. (Round contribution margin ratio to 2 decimal places, e.g. 15.25% and final answer to 0 decimal places, e.g. 125.) Volume of sales to be maintained $ 4,759,138
Expert Solution
steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Sales Tax, Restaurant Tax and Lodging Taxes
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS