The CVP income statement for Blossom Machine Company for 2021 appears below. BLOSSOMMACHINE COMPANY Income Statement For the Year Ended December 31, 2021 Sales (42,000 units) $1,050,000 Variable expenses Contribution margin Fixed expenses Net income (loss) 735,000 (a) 315,000 360,000 ($45,000) Answer the following independent questions. What was the company's break-even sales dollars in 2021? Break-even point in sales dollars $

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
### Blossom Machine Company CVP Income Statement for 2021

The CVP income statement for Blossom Machine Company for the year 2021 is presented below.

#### Blossom Machine Company
**Income Statement**
**For the Year Ended December 31, 2021**

- **Sales (42,000 units):** $1,050,000
- **Variable expenses:** $735,000
- **Contribution margin:** $315,000
- **Fixed expenses:** $360,000
- **Net income (loss):** ($45,000)

### Independent Questions

**(a) What was the company's break-even sales dollars in 2021?**

- **Break-even point in sales dollars:** $ ________

Explanation of Items in the Statement:

- **Sales:** The total revenue generated from selling 42,000 units.
- **Variable expenses:** Costs that vary directly with the level of production or sales volume.
- **Contribution margin:** The difference between sales and variable expenses. It represents the amount available to cover fixed expenses and provide profit.
- **Fixed expenses:** Costs that do not vary with production or sales volume.
- **Net income (loss):** The residual profit or loss after subtracting fixed expenses from the contribution margin. Here, the company has a net loss of $45,000.
Transcribed Image Text:### Blossom Machine Company CVP Income Statement for 2021 The CVP income statement for Blossom Machine Company for the year 2021 is presented below. #### Blossom Machine Company **Income Statement** **For the Year Ended December 31, 2021** - **Sales (42,000 units):** $1,050,000 - **Variable expenses:** $735,000 - **Contribution margin:** $315,000 - **Fixed expenses:** $360,000 - **Net income (loss):** ($45,000) ### Independent Questions **(a) What was the company's break-even sales dollars in 2021?** - **Break-even point in sales dollars:** $ ________ Explanation of Items in the Statement: - **Sales:** The total revenue generated from selling 42,000 units. - **Variable expenses:** Costs that vary directly with the level of production or sales volume. - **Contribution margin:** The difference between sales and variable expenses. It represents the amount available to cover fixed expenses and provide profit. - **Fixed expenses:** Costs that do not vary with production or sales volume. - **Net income (loss):** The residual profit or loss after subtracting fixed expenses from the contribution margin. Here, the company has a net loss of $45,000.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Discontinuing operations for a product or a service line
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