Sunn Company manufactures a single product that sells for $110 per unit and whose variable costs are $88 per unit. The company's annual fixed costs are $308,000. Management targets an annual income of $550,000. (1) Compute the unit sales to earn the target income. Numerator: 1 1 Denominator: (2) Compute the dollar sales to earn the target income. Numerator: 1 1 Denominator: = = = Units to Achieve Target Units to achieve target Dollars to Achieve Target Dollars to achieve target

Sunn Company manufactures a single product that sells for $110 per unit and whose variable costs are $88 per unit. The company's annual fixed costs are $308,000. Management targets an annual income of $550,000. (1) Compute the unit sales to earn the target income. Numerator: 1 1 Denominator: (2) Compute the dollar sales to earn the target income. Numerator: 1 1 Denominator: = = = Units to Achieve Target Units to achieve target Dollars to Achieve Target Dollars to achieve target

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 47E: Klamath Company produces a single product. The projected income statement for the coming year is as...

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Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?
Klamath Company produces a single product. The projected income statement for the coming year is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. 2. Suppose 10,000 units are sold above break-even. What is the operating income? 3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue. (Note: Round the contribution margin ratio to four decimal places, and round the sales revenue to the nearest dollar.) Suppose that revenues are 200,000 more than expected for the coming year. What would the total operating income be?
Manatoah Manufacturing produces 3 models of window air conditioners: model 101, model 201, and model 301. The sales price and variable costs for these three models are as follows: The current product mix is 4:3:2. The three models share total fixed costs of $430,000. Calculate the sales price per composite unit. What is the contribution margin per composite unit? Calculate Manatoahs break-even point in both dollars and units. Using an income statement format, prove that this is the break-even point.
Sunn Company manufactures a single product that sells for $240 per unit and whose variable costs are $192 per unit. The company's annual fixed costs are $734,400. Management targets an annual income of $1,200,000. (1) Compute the unit sales to earn the target income. Numerator: Denominator: (2) Compute the dollar sales to earn the target income. Numerator: Denominator: = = Units to Achieve Target Units to achieve target Dollars to Achieve Target Dollars to achieve target
Sunn Company manufactures a single product that sells for $120 per unit and whose variable costs are $90 per unit. The company's annual fixed costs are $432.000 Management targets an annual income of $750,000. (1) Compute the unit sales to earn the target income. Numerator: 1 Denominator: (2) Compute the dollar sales to earn the target income.. Numerator: Denominator P M = Units to Achieve Target Units to achieve target Dollars to Achieve Target Dollars to achieve target
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Blanchard Company manufactures a single product that sells for $136 per unit and whose total variable costs are $102 per unit. The company's annual fixed costs are $496,400. Management targets an annual pretax income of $850,000. Assume that fixed costs remain at $496,400. (1) Compute the unit sales to earn the target income. Choose Numerator: Fixed costs plus pretax income Choose Denominator: = Units to Achieve Target Contribution margin per unit = Units to achieve target 0 (2) Compute the dollar sales to earn the target income. Choose Numerator: Fixed costs plus pretax income Choose Denominator: Dollars to Achieve Target 1 Contribution margin ratio = Dollars to achieve target 0
Blanchard Company manufactures a single product that sells for $180 per unit and whose total variable costs are $126 per unit. The company's annual fixed costs are $842,400. Management targets an annual pretax income of $1,350,000. Assume that fixed costs remain at $842,400. (1) Compute the unit sales to earn the target income. Choose Numerator: Choose Denominator: Units to Achieve Target Units to achieve target %3D (2) Compute the dollar sales to earn the target income. Choose Numerator: Choose Denominator: Dollars to Achieve Target Dollars to achieve target %3D
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A company reports the following information for the single product it manufactures. Sales price Variable cost per unit Total fixed costs Target income (a) Compute contribution margin per unit. $ 230 per unit $ 161 per unit $ 986,700 per year $572,700 per year Contribution margin (b) Compute the break-even point in units. Numerator (c) Compute the unit sales to earn the target income. Numerator Denominator = Break-Even Units = = Break-even units Denominator = Units to Achieve Target = Units to achieve target
A firm manufactures a product that sells for $16 per unit. Variable cost per unit is $8 and fixed cost per period is $1680. Capacity per period is 2200 units. (a) Develop an algebraic statement for the revenue function and the cost function. (b) Determine the number of units required to be sold to break even. (c) Compute the break-even point as a percent of capacity. (d) Compute the break-even point in sales dollars. (a) The revenue function is TR = (Type an expression using x as the variable. Do not include the $ symbol in your answer.) The cost function is TC = (Type an expression using x as the variable. Do not include the $ symbol in your answer.) (b) The number of units required to be sold to break even is| units. (Round up to the nearest whole number.) (c) The break-even point as a percent of capacity is%. (Round to two decimal places as needed.) (d) The break-even point in sales dollars is $ (Round to the nearest cent as needed.)
Suppose a company has fixed costs of $47,600 and variable cost per unit of ². +222 dollars, where x is the total number of dollars per unit. units produced. Suppose further that the selling price of its product is 1656- (a) Find the break-even points. (Enter your answers as a comma-separated list.) x= (b) Find the maximum revenue. (Round your answer to the nearest cent.) $ (c) Form the profit function P(x) from the cost and revenue functions. P(x) Find maximum profit. (d) What price will maximize the profit? (Round your answer to the nearest cent.)