Variable costs as a percentage of sales solve question Variable costs as a percentage of sales for Lemon Inc. are 80%,current sales are $600,000, and fixed costs are $130,000.What is the break even point in sales?a. 610,000b. 520,000c. 650,000d. none of the above

To calculate the break-even point in sales for Lemon Inc., we need to use the contribution margin…

Answered: Variable costs as a percentage of sales…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 23E

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Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?
16..
Suppose Morrison Corp.’s breakeven point is revenues of $1,100,000. Fixed costs are $660,000. Q1. Compute the contribution margin percentage. Q2. Compute the selling price if variable costs are $16 per unit. Q3. Suppose 75,000 units are sold. Compute the margin of safety in units and dollars. Q4. What does this tell you about the risk of Morrison making a loss? What are the most likely reasons for this risk to increase?
Stellar Company has the following sales, variable cost, and fixed cost. If sales increase by $10,000 then their profit increases/decreases by how much? Sales $50,000 Variable Costs $9600 Fixed Costs $27,000
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Stellar Company has the following sales, variable cost, and fixed cost. If sales increase by $10,000 then their profit increases/ decreases by how much? Sales $50,000 Variable Costs $7,500 Fixed Costs $28,000
7. the maximum that they can increase the fixed cost? Company ET 's fixed costs were $40 000, variable costs 60% of sales and profit was $22 000. If variable costs have increased by 10% (of the variable costs) and fixed costs have increased to $44 000, what sales volume does ET now need to make the same profit assuming there is no increase in selling prices?
What is the correct choice? How many total dollars of sales must BAC Company sell to break even if the selling price per unit is $8.50, variable costs are $4.00 per unit, and fixed costs are $9,000? a. $4,000 b. $8,500 c. $9,000 d. $17,000
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1. Fixed costs are P 240,000 and contribution margin ratio is 48%. What is breakeven point peso sales? (Answer the figures only; no decimal places) 2. A business has selling price of P 129.50 with an average variable cost of P 54.40. Fixed costs are P 1,400,000. Calculate the following: What is the break-even units? Answer the figures only; no decimal places)

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Variable costs as a percentage of sales for Lemon Inc. are 80%, current sales are $600,000, and fixed costs are $130,000. What is the break even point in sales? a. 610,000 b. 520,000 c. 650,000 d. none of the above