Urban Styles is a retail store selling men's apparel. The variable cost per shirt is $25, and the sales priceis $45 per shirt. Urban Syles expects to sell 500,000 shirts this year, which would generate a before-taxprofit of $4,000,000. Additionally, the company received a $20,000 grant from the city to renovate itsbuilding. DOL? Nova Tech's partial income statement is provided as follows: Sales: $1,000,000Less: Variable costs: $500,000 Contribution Margin: $500,000 Less: Fixed costs: $250,000 One-TimeCharity Donation: $100,000 Net Operating Income: $250,000Requirement: What is Nova Tech's degree of operating leverage?Options:8.259.505.006.50

To calculate Nova Tech's Degree of Operating Leverage (DOL), we use the formula:DOL = Contribution…

Answered: Urban Styles is a retail store selling…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 39P

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Dorcan Corporation manufactures and sells T-shirts imprinted with college names and slogans. Last year, the shirts sold for $7.50 each, and the variable cost to manufacture them was $2.25 per unit. The company needed to sell 20,000 shirts to break-even. The after tax net income last year was $5,040. Donnelly's expectations for the coming year include the following: (CMA adapted) ∙ The sales price of the T-shirts will be $9. ∙ Variable cost to manufacture will increase by one-third. ∙ Fixed costs will increase by 10%. ∙ The income tax rate of 40% will be unchanged. Sales for the coming year are expected to exceed last year's by 1,000 units. If this occurs, Dorcan's sales volume in the coming year will be: 23,400 units. 21,960 units. 22,600 units. 21,000 units.
Dorcan Corporation manufactures and sells T-shirts imprinted with college names and slogans. Last year, the shirts sold for $7.50 each, and the variable cost to manufacture them was $2.25 per unit. The company needed to sell 20,000 shirts to break-even. The after tax net income last year was $5,040. Donnelly's expectations for the coming year include the following: (CMA adapted)The sales price of the T-shirts will be $9. ∙ Variable cost to manufacture will increase by one-third. ∙ Fixed costs will increase by 10%. ∙ The income tax rate of 40% will be unchanged. The selling price that would maintain the same contribution margin ratio as last year is: $10.00. $8.25. $9.00. $9.50.
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Pens and Prints manufactures and sells T-shirts imprinted with college names and slogans. Last year, the shirts sold for $7.50 each, and the variable cost to manufacture them was $2.25 per unit. The company needed to sell 20,000 shirts to break-even. The after tax net income last year was $5,040. Donnelly's expectations for the coming year include the following: • The sales price of the T-shirts will be $9• Variable cost to manufacture will increase by one-third • Fixed costs will increase by 10%• The income tax rate of 40% will be unchanged. Sales for the coming year are expected to exceed last year's by 1,000 units. If this occurs, How much will be the sales revenue in the coming year?
Green Apparel is a retail men's clothing store. Green's variable cost is $18 per shirt, and the sales price is $38 per shirt. Green plans to sell 350,000 shirts for the year, and at this level, they would generate a before-tax profit of $2,100,000. Green Apparel also received a discount of 5% on their office furniture, which cost $10,000. What is the DCL at this volume level? Nara Industries presents its partial income statement as follows: Sales: $2,000,000 Less: Variable costs: $1,200,000 Contribution Margin: $800,000 Less: Fixed costs: $300,000 Additional Staff Bonuses: $25,000 Net Operating Income: $500,000 Requirement: What is Nara Industries' degree of operating leverage? Options: 5.66 2.90 2.67 3.05
Dona Corporation manufactures and sells T-shirts imprinted with college name and slogans. Last year, the shirts sold for P7.50 each, and the variable cost to manufacture them was P2.25 per unit. The company needed to sell 20,000 shirts to breakeven. The net income last year was P5,040. Dona’s expectation for the coming year include the following: • The sales price of the t-shirt will be P9.00 • Variable cost to manufacture will increase by one-third. • Fixed cost will increase by 10% • The income tax rate of 40% will be unchanged a. The selling price that would maintain the same contribution margin rate as last year is ______________- b. The number of T-shirts Dona must sell to break even in the coming year is ______________ c. If Dona wishes to earn P22,500 in net income for the coming year, the company’s sales in pesos must be __________
1. If the company want to achieve target net income $800,000 and the tax rate is 30%, calculate how many units to be sold to achieve those targets? 2. The owner estimates that if he can spend an additional $75,000 towards sales promotion,sales in unit may increase by 30%. What should Mr. Budi’ decision be?
pp. Subject :- Accounting
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The Houston Armadillos, a minor-league baseball team, play their weekly games in a small stadium just outside Houston. The stadium holds 10,000 people and tickets sell for $10 each. The franchise owner estimates that the team's annual fixed expenses are $180,000, and the variable expense per ticket sold is $1. (In the following requirements, ignore income taxes.) Required: 1. Using excel spreadsheet, prepare a profit-volume graph for the Houston Armadillos 2. What is the safety margin for the baseball franchise if the team plays a 12-game season and the team owner expects the stadium to be 30 percent full for each game? 3. If the stadium is half full for each game, what ticket price would the team have to charge in order to break even?

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