Accounting: What the Numbers Mean
Accounting: What the Numbers Mean
12th Edition
ISBN: 9781308841380
Author: David H. Marshall, Wayne W. McManus, Daniel F. Viele
Publisher: McGraw Hill
Question
Book Icon
Chapter 12, Problem 12.14E
To determine

(A)

Concept Introduction:

Contribution margin ratio is defined as the portion of each sales dollar which is left after all variable costs are incurred and the amount is available to cover fixed cost to generate profits. It calculates change in contribution margin margin for every change in revenue. It is calculated as:

Contribution Margin Ratio = Contribution Margin/ Revenue.

Break Even Point is the amount of revenue realized where the firm will have neither profit nor loss. In other words, break even point is where operating profit is equal to zero.

The selling price of the new product if the average contribution margin ratio is not changed.

To determine

(B)

Concept Introduction:

Contribution margin ratio is defined as the portion of each sales dollar which is left after all variable costs are incurred and the amount is available to cover fixed cost to generate profits. It calculates change in contribution margin margin for every change in revenue. It is calculated as:

Contribution Margin Ratio = Contribution Margin/ Revenue.

Break Even Point is the amount of revenue realized where the firm will have neither profit nor loss. In other words, break even point is where operating profit is equal to zero.

The number of units required to be sold at break even point if fixed cost is added by $30600.

To determine

(C)

Concept Introduction:

Contribution margin ratio is defined as the portion of each sales dollar which is left after all variable costs are incurred and the amount is available to cover fixed cost to generate profits. It calculates change in contribution margin margin for every change in revenue. It is calculated as:

Contribution Margin Ratio = Contribution Margin/ Revenue.

Break Even Point is the amount of revenue realized where the firm will have neither profit nor loss. In other words, break even point is where operating profit is equal to zero.

Requirement 1:

The total operating income if 20000 new product units are sold at $13.75 per unit.

Requirement 2:

To determine

The average contribution margin ratio if 20000 new product units are sold at $13.75 per unit.

To determine

(D)

Concept Introduction:

Contribution margin ratio is defined as the portion of each sales dollar which is left after all variable costs are incurred and the amount is available to cover fixed cost to generate profits. It calculates change in contribution margin margin for every change in revenue. It is calculated as:

Contribution Margin Ratio = Contribution Margin/ Revenue.

Break Even Point is the amount of revenue realized where the firm will have neither profit nor loss. In other words, break even point is where operating profit is equal to zero.

Requirement 1:

Operating Income of existing product

Requirement 2:

To determine

The complications, if some volume from existing product is added to new product.

Blurred answer
Students have asked these similar questions
Summary: You will investigate a case of asset theft involving several fraudsters for this assignment. The case offers a chance to assess an organization's corporate governance, fraud prevention, and risk factors.   Get ready: Moha Computer Services Limited Links to an external website: Finish the media activity. The scenario you need to finish the assignment is provided by this media activity.   Directions: Make a four to five-page paper that covers the following topics. Management must be questioned by an auditor regarding the efficacy of internal controls and the potential for fraud. A number of warning signs point to the potential for fraud in this instance. List at least three red flags (risk factors for fraud) that apply to the Moha case. Sort them into three groups: opportunities, pressures/incentives, and (ethical) attitudes/justifications. Determine which people and organizations were impacted by Moha Computer Services Limited's enormous scam. Describe the fraud's financial and…
Co
Critically assess the role of the Conceptual Framework in financial reporting and its influence onaccounting theory and practice. Discuss how the qualitative characteristics outlined in theConceptual Framework enhance financial reporting and contribute to decision-usefulness. Provideexamples to support your analysis.
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education