The budgets of four companies yield the following information: Company R. $445,000 $224,000 $680,000 Target sales Variable expenses 170,000 270,000 $159,000 $ 93,000 Fixed expenses Operating income (loss) $150,000 $133,000 ...... .
The budgets of four companies yield the following information: Company R. $445,000 $224,000 $680,000 Target sales Variable expenses 170,000 270,000 $159,000 $ 93,000 Fixed expenses Operating income (loss) $150,000 $133,000 ...... .
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Include contribution Margin
Transcribed Image Text:**P7-61A Find Missing Data in CVP Relationships (Learning Objectives 1 & 2)**
The budgets of four companies yield the following information:
| Company | Q | R | S | T |
|------------|-----------|-----------|-----------|-----------|
| Target sales | $680,000 | $445,000 | $224,000 | $______ |
| Variable expenses | $170,000 | $________ | $________ | $270,000 |
| Fixed expenses | $________ | $159,000 | $ 93,000 | $________ |
| Operating income (loss) | $150,000 | $________ | $________ | $133,000 |
| Units sold | ________ | 106,800 | 12,500 | 18,000 |
| Contribution margin per unit | $ 6.25 | $________ | $ 8.96 | $ 35.00 |
| Contribution margin ratio | ________ | 0.60 | ________ | ________ |
**Requirements**
1. Fill in the blanks for each company.
2. Compute breakeven, in sales dollars, for each company. Which company has the lowest breakeven point in sales dollars? What causes the low breakeven point?
This exercise focuses on understanding the relationships within Cost-Volume-Profit (CVP) analysis by examining the data for several companies and computing missing values.
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