The single-column CVP income statements shown below are available for Wildhorse Company and Blossom Company,SalesVariable costsContribution marginFixed costsNet incomeWildhorseWildhorse Co.Blossom$495,000239,000256,0001000156,000$100,000Blossom Co.Degree of Operating Leverage$495,000(a1) Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 1.15.)$51,000444,000344,000$100,000(b) Assuming that sales revenue increases by 10% (due to a 10% increase in the number of units sold), prepare a single-plumn CVP income statement for each company.Wildhorse Company$tA$Blossom Company

Income statement is a financial statement that shows profitability, total revenue and total…

The single-column CVP income statements shown below are available for Wildhorse Company and Blossom Company. Sales Variable costs Contribution margin Fixed costs Net income Wildhorse Wildhorse Co. Blossom $495,000 239,000 256,000 V 156,000 $100,000 Degree of Operating Leverage Blossom Co. (a1) Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 1.15.) $ $495,000 $ 51,000 444,000 (b) Assuming that sales revenue increases by 10% (due to a 10% increase in the number of units sold), prepare a single-plumn CVP income statement for each company. 344,000 $100,000 Wildhorse Company $ Blossom Company

The single-column CVP income statements shown below are available for Wildhorse Company and Blossom Company. Sales Variable costs Contribution margin Fixed costs Net income Wildhorse Wildhorse Co. Blossom $495,000 239,000 256,000 V 156,000 $100,000 Degree of Operating Leverage Blossom Co. (a1) Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 1.15.) $ $495,000 $ 51,000 444,000 (b) Assuming that sales revenue increases by 10% (due to a 10% increase in the number of units sold), prepare a single-plumn CVP income statement for each company. 344,000 $100,000 Wildhorse Company $ Blossom Company

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Refer to the table below which information refers to Triple A Corp. who produced and sold 50,000 units during a recent accounting period: How much is the contribution margin per unit? Sales 850,000 Manufacturing costs Fixed 210,000 Variable 140,000 Selling and Administrative costs Fixed 300,000 Variable 45,000 income tax rate 40% 1. P 16.60 2. P 31.00 3. P 7.30 4. P 13.30 Group of answer choices 1 2 3 4
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Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $275,600 $882,000 Variable costs 110,600 529,200 Contribution margin $165,000 $352,800 Fixed costs 110,000 205,800 Income from operations $55,000 $147,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Вeck Inc. Bryant Inc. 2.4 b. How much would income from operations increase for each company if the sales of each increased by 20%? If required, round answers to nearest whole number. Dollars Percentage Вeck Inc. $ 33,000 60 V % Bryant Inc. 70,560 57 X % c. The difference in the increases of income from operations is due to the difference in the operating leverages. Beck Inc.'s higher v operating leverage means that its fixed costs are a larger percentage of contribution margin than are Bryant Inc.'s.
The following income statements illustrate different cost structures for two competing companies: Income Statements Company Name Perez Munoz Number of customers (a) 81 81 Sales revenue (a × $250) $ 20,250 $ 20,250 Variable cost (a × $175) N/A (14,175 ) Variable cost (a × $0) 0 N/A Contribution margin 20,250 6,075 Fixed cost (14,175 ) 0 Net income $ 6,075 $ 6,075 Required Reconstruct Perez’s income statement, assuming that it serves 162 customers when it lures 81 customers away from Munoz by lowering the sales price to $150 per customer. Reconstruct Munoz’s income statement, assuming that it serves 162 customers when it lures 81 customers away from Perez by lowering the sales price to $150 per customer.
MANAGERIAL ACCOUNTING
Number 3
Piedmont Company segments its business into two regions-North and South. The company prepared the contribution format segmented income statement as shown: Sales Variable expenses Contribution margin Traceable fixed expenses Segment margin Common fixed expenses Net operating income Total Company $ 937,500 637,500 300,000 142,000 158,000 62,000 $ 96,000 North $ 750,000 600,000 150,000 71,000 $ 79,000 Required: 1. Compute the companywide break-even point in dollar sales. 2. Compute the break-even point in dollar sales for the North region. 3. Compute the break-even point in dollar sales for the South region. South $ 187,500 37,500 150,000 71,000 $ 79,000
Required information A company sold a total of 1,000 units for total sales revenue of $70,000. The company incurred total variable expenses of $38,500 and total fixed expenses of $ 23,310. Based on this, the company reported a total contribution margin of $31,500 and net operating income of $ 8,190. Use this information to answer the following questions. Assume that all units are within the relevant range. Calculate the margin of safety in dollars and the margin of safety percentage. Margin of safety in dollars Margin of safety percentage
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Shirley Incorporated has three divisions, King, West and Gold. All common fixed costs are unavoidable. Following is the segmented income statement for the previous year: Sales revenue Variable costs Contribution margin Direct fixed costs Segment margin Common fixed costs (allocated) Net operating income (loss) King $ 1,040,000 312,000 $ 728,000 104,000 $ 624,000 391,000 $ 233,000 Required: a. What would Shirley's net income (loss) be if the West Division were dropped? b. What would Shirley's net income (loss) be if the Gold Division were dropped? Complete this question by entering your answers in the tabs below. Required A Required B What would Shirley's net income (loss) be if the West Division were dropped? Gold $426,000 251,340 $ 174,660 48.000 $ 126,660 159,375 $ (32,715) Total $ 2,048,000 889,260 $ 1,158,740 192,000 $ 966,740 763,000 $ 203,740
Consider the following summary modified income statement for Tech Inc.: Sales $593,000 Variable Operating Costs 252,000 Contribution Margin $341,000 Fixed Operating Costs 121,000 Operating Income $220,000 Interest Expense 26,000 Net Income $194,000 Calculate Tech's degree of operating leverage. A В C E 1 2 Degree of Operating Leverage = 4 5 7 8 9 10 3. 6.
Bryce Co. sales are $897,000, variable costs are $468,500, and operating income is $276,000. The contribution margin ratio is Oa. $2.2% Ob. 57.4% Oc. 47.8% Od. 43.5%