Variable service and marketing costs change with volume. Fixed depreciation will remain the same, but fixed administrative costs willincrease by 5 percent beginning September 1. Maintenance and repair are provided by contract, which calls for a 1 percent increase inSeptember.Required:Prepare a budgeted income statement for September. (Round intermediate calculations to 2 decimals places.)Sales revenueService costs:VARMIT-B-GONEBudgeted Income StatementFor the Month of SeptemberVariable costsMaintenance and repairDepreciation (fixed)Total service costsMarketing and administrative:Marketing (variable).Administrative (fixed)Total marketing and administrative costsTotal costsOperating profit$$$$39,00039,00092,40092,400131,400(131,400) Varmit-B-Gone is a pest control service that operates in a suburban neighborhood. The company attempts to make service calls atleast once a month to all homes that subscribe to its service. It makes more frequent calls during the summer. The number ofsubscribers also varies with the season. The number of subscribers and the average number of calls to each subscriber for the monthsof interest follow:MarchAprilMayJuneJulyAugustSubscribers8509501,6501,8501,8502,000Service calls (persubscriber)0.6The average price charged for a service call is $80. Of the service calls, 30 percent are paid in the month the service is rendered, 60percent in the month after the service is rendered, and 8 percent in the second month after. The remaining 2 percent is uncollectible.Service costs0.91.52.53.02.4Varmit-B-Gone estimates that the number of subscribers in September should fall 10 percent below August levels, and the number ofservice calls per subscriber should decrease by an estimated 20 percent. The following information is available for costs incurred inAugust. All costs except depreciation are paid in cash.Variable costsMaintenance and repair.Depreciation (fixed)TotalMarketing and administrative costsMarketing (variable)Administrative (fixed)TotalTotal costs$ 21,00019,00039,000$ 79,000$ 25,00088,000$113,000$192,000

Income statement is one of the financial statement of the company which shows the net profit earned…

Variable service and marketing costs change with volume. Fixed depreciation will remain the same, but fixed administrative costs will increase by 5 percent beginning September 1. Maintenance and repair are provided by contract, which calls for a 1 percent increase in September. Required: Prepare a budgeted income statement for September. (Round intermediate calculations to 2 decimals places.) Sales revenue Service costs: VARMIT-B-GONE Budgeted Income Statement For the Month of September Variable costs Maintenance and repair Depreciation (fixed) Total service costs Marketing and administrative: Marketing (variable) Administrative (fixed) Total marketing and administrative costs Total costs Operating profit $ $ $ $ 39,000 39,000 92,400 92,400 131,400 (131,400)

Variable service and marketing costs change with volume. Fixed depreciation will remain the same, but fixed administrative costs will increase by 5 percent beginning September 1. Maintenance and repair are provided by contract, which calls for a 1 percent increase in September. Required: Prepare a budgeted income statement for September. (Round intermediate calculations to 2 decimals places.) Sales revenue Service costs: VARMIT-B-GONE Budgeted Income Statement For the Month of September Variable costs Maintenance and repair Depreciation (fixed) Total service costs Marketing and administrative: Marketing (variable) Administrative (fixed) Total marketing and administrative costs Total costs Operating profit $ $ $ $ 39,000 39,000 92,400 92,400 131,400 (131,400)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Pléase Answer Jkl And M Here + eAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false Update Print Item Each unit requires direct labor of 2.30 hours. The labor rate is $11.70 per hour and next year's direct labor budget totals $861,120. How many units are included in the production budget for next year? Do not round intermediate computation. units Previous Next
Please do not give solution in image format thanku
Contribution margin, break-even sales, cost-volume-profit chart, marginof safety, and operating leverageWolsey Industries Inc. expects to maintain the same inventories at the end of 20Y3 as at the beginning of the year. The total of all productioncosts for the year is therefore assumed to be equal to the cost of goodssold. With this in mind, the various department heads were asked tosubmit estimates of the costs for their departments during the year. Asummary report of these estimates is as attached: It is expected that 21,875 units will be sold at a price of $160 a unit.Maximum sales within the relevant range are 27,000 units.Instructions Prepare an estimated income statement for 20Y3.What is the expected contribution margin ratio?Determine the break-even sales in units and dollars. Construct a cost-volume-profit chart indicating the break-even sales.What is the expected margin of safety in dollars and as a percentage ofsales? Determine the operating leverage.It is expected that…
Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows: EstimatedFixed Cost Estimated Variable Cost(per unit sold) Production costs: Direct materials $28 Direct labor 19 Factory overhead $354,100 14 Selling expenses: Sales salaries and commissions 73,600 6 Advertising 24,900 Travel 5,500 Miscellaneous selling expense 6,100 6 Administrative expenses: Office and officers' salaries 71,900 Supplies 8,900…
Break-even sales and sales to realize operating income For the current year ended March 31, Kadel Company expects fixed costs of $521,600, a unit variable cost of $66, and a unit selling price of $98. a. Compute the anticipated break-even sales (units). units b. Compute the sales (units) required to realize operating income of $118,400. units
Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows: EstimatedFixed Cost Estimated Variable Cost(per unit sold) Production costs: Direct materials — $26 Direct labor — 17 Factory overhead $265,400 13 Selling expenses: Sales salaries and commissions 55,200 6 Advertising 18,700 — Travel 4,100 — Miscellaneous selling expense 4,600 5 Administrative expenses: Office and officers' salaries 53,900 — Supplies 6,600 2…
Find the breakeven point for next year having 20% increased on commision rate?
answer choices: a. increase by 332 units b.decrease by 480 units c.decrease by 332 units d.increase by 480 units
Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows: Estimated Estimated Variable Cost Fixed Cost (per unit sold) Production costs: Direct materials $28 Direct labor 19 Factory overhead $139,800 14 Selling expenses: Sales salaries and commissions 29,000 6 Advertising 9,800 Travel 2,200 Miscellaneous selling expense 2,400 Administrative expenses: orfice and officers' salaries 28,400 Supplies 3,500 2 Miscellaneous administrative expense 3,300 3 Total $218,400 $78 It is expected that 6,300 units will be sold at a price of $156 a unit. Maximum sales…
Saved Required information [The following information applies to the questions displayed below.] Brodrick Company expects to produce 21,200 units for the year ending December 31. A flexible budget for 21,200 units of production reflects sales of $572,400; variable costs of $63,600; and fixed costs of $143,000. If the company instead expects to produce and sell 26,100 units for the year, calculate the expected level of income from operations. -----Flexible Budget-- -Flexible Budget at ---- Variable Amount Total Fixed Cost 21,200 units 26,100 units per Unit Contribution margin ere to search
es Required information [The following information applies to the questions displayed below.] Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates for budgeting purposes and the actual results for May as shown below. Revenue Employee salaries and wages Travel expenses Other expenses Fixed Element per Month $ 50,000 $ 36,000 Variable Element per Customer Served $ 5,000 $ 1,100 Actual Total for May $ 160,000 $ 88,000 $ 600 $ 19,000 $ 34,500 When preparing its planning budget, the company estimated it would serve 30 customers per month; however, during May the company actually served 35 customers. Required: 1. What amount of revenue would be included in Adger's flexible budget for May?
Break-Even in Sales Revenue, Changes in Variables Carmichael Corporation is in the process of preparing next year's budget. The pro forma income statement for the current year is as follows: $1,800,000 Sales Cost of sales: Direct materials Direct labor Variable overhead Fixed overhead Gross profit Selling and administrative expenses: Variable Fixed Operating income Required: $250,000 180,000 106,000 100,000 $400,000 350,000 636,000 $1,164,000 750,000 $414,000 1. What is the break-even sales revenue for Carmichael Corporation for the current year? In your calculations, carry the contribution margin ratio to two decimal places. $ 937,500 2. For the coming year, the management of Carmichael Corporation anticipates an 8 percent increase in variable costs and a $60,000 increase in fixed expenses. What is the break-even point in dollars for next year? In your computation, round the contribution margin ratio to four decimal places. Round your final answer to the nearest dollar. (CMA adapted)