Quick answer of this accounting questions The sports equipment department of Mountain Athletics Store is analyzingthe performance of their tennis racket line. Manager John Davis hascollected the following data:Total Sales (800 tennis rackets): $400,000 Variable Costs: $240,000 FixedCosts: $100,000 Tax Rate: 30%Calculate: a. Contribution Margin (CM) b. Unit CM c. CM Ratio

Step 1: Definition of Contribution Margin (CM)The contribution margin (CM) is the amount remaining…

Answered: The sports equipment department of…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 10EB: Keleher Industries manufactures pet doors and sells them directly to the consumer via their web...

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Peak performance Inc. Has the following data for its product: please answer the accounting question
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Keleher Industries manufactures pet doors and sells them directly to the consumer via their web site. The marketing manager believes that if the company invests in new software, they will increase their sales by 10%. The new software will increase fixed costs by $400 per month. Prepare a forecasted contribution margin income statement for Keleher Industries reflecting the new software cost and associated increase in sales. The previous annual statement is as follows:
Windows is a small company that installs windows. Its cost structure is as follows: LOADING... (Click the icon to view the cost structure.) Traylor Windows' breakeven revenues is $1,870,000 and breakeven units is 3,400. Calculate the margin of safety in units and dollars and the margin of safety percentage if Traylor Windows expects to sell 3,600 windows in the year. Begin with calculating the margin of safety in dollars. Determine the formula to calculate the margin of safety in dollars. Then, enter the amounts and calculate the margin of safety in dollars. Budgeted revenue - Breakeven revenue = Margin of safety in dollars - = Next, determine the formula, enter the amounts, and calculate the margin of safety in units. Budgeted units - Breakeven units = Margin of safety in units - = Finally, calculate the margin of safety percentage if…
Calculate the number of helmets Head-First must sell to earn operating income of $81,900. _____________helmets Refer to the list below for the exact wording of text items within your income statement. Amount Descriptions Operating income Operating loss Sales Total contribution margin Total fixed cost Total variable cost Units to Earn Target Income Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Unit variable cost is $45 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $49,500 (includes fixed factory overhead and fixed selling and administrative expense). Required: 1. Calculate the number of helmets Head-First must sell to earn operating income of $81,900. 2. Check your answer by preparing a contribution margin income statement based on the number of units calculated
Feather Friends, Incorporated, distributes a high-quality wooden birdhouse that sells for $20 per unit. Variable expenses are $10 per unit, and fixed expenses total $190,000 per year. Its operating results for last year were as follows: Sales (23,000 units) Variable expenses Contribution margin Fixed expenses Operating income Required: Answer each question Independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in sales dollars. 3. Assume this year's total sales increase by $40,000. If the fixed expenses do not change, how much will operating Income Increase? Assume that the operating results for last year were as in the question data. 4-a. Compute the degree of operating leverage based on last year's sales. 4-b. The president expects sales to increase by 16% next year. Using the degree of operating leverage from last year, what percentage Increase in operating Income will the company realize this year?…
Deluxe Homes is a residential Home Builder. Based on their current production of 300 homes per year, they currently make a profit of $20,000 per unit, based on the following costs per unit: Direct labor $ 20,000 Direct materials 200,000 Variable overhead 30,000 Fixed overhead 40,000 Variable selling costs 10,000 Fixed selling costs 10,000 Total costs per unit $310,000 Required Each of these are separate situations: A. Prepare an income statement based on the information provided. B. What is the profit and cost per unit if production is increased to 400 homes per year, and there is an increase of $1.50 million in total fixed overhead costs?
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Wildhorse Repairs has 200 auto-maintenance service outlets nationwide. It performs primarily two lines of service: oil changes and brake repair. Oil change-related services represent 70% of its sales and provide a contribution margin ratio of 20%. Brake repair represents 30% of its sales and provides a 40% contribution margin ratio. The company's fixed costs are $13,416,000 (that is, $67,080 per service outlet). Sales mix is determined based upon total sales dollars. (a) Your answer is correct. Calculate the dollar amount of each type of service that the company must provide in order to break even. (Use Weighted- Average Contribution Margin Ratio rounded to 2 decimal places e.g. 0.25 and round final answers to 0 decimal places, e.g. 2,510.) Sales Dollars Needed Per Product Oil changes Brake repair $ 36120000 15480000
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Bob's Bike Shop has the following income statement. Sales ($150 per unit) Less Cost of Goods sold ($96 per unit) Gross margin Less Operating costs Salaries Advertising Shipping ($6 per unit) Operating income Required: a. b. d. $150,000 96,000 $24,000 12,000 54,000 6,000 42,000 $ 12,000 Calculate the contribution margin per unit. Calculate the contribution margin ratio. Calculate the breakeven point in units. In sales dollars. Calculate the margin of safety in units. In dollars.

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