Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income. The Company’s CM ratio and the break-even point in unit sales and dollar sales

Question

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Answer 1

Question

Chapter 2, Problem 2.22P

1.

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The Company’s CM ratio and the break-even point in unit sales and dollar sales

2.

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The increase/decrease in company’s net operating income.

3.

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The revised net operating income/loss.

4

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The number of units sold to attain a target profit of $9750.

5

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The new CM ratio along break-even point in unit sales and dollars sales.

5b

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

To prepare: Two contribution statements showing units and percentages.

5c

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

To evaluate: Whether the automation of the company’s operations is right or wrong.

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KIARA LIMITED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER: ASSETS Property, plant and equipment (cost) Accumulated depreciation Long-term investments Inventory Accounts receivable Company tax paid in advance Bank EQUITY AND LIABILITIES 2024 2023 R R 2 490 000 1 620 000 (630 000) 660 000 1 050 000 1 230 000 30 000 (480 000) 450 000 1 290 000 900 000 0 750 000 660 000 5 580 000 4 440 000 Ordinary share capital 2 700 000 2 000 000 Retained income 1 500 000 1 158 000 Long-term loan from Kip Bank (15%) 900 000 1 000 000 Accounts payable 480 000 228 000 Company tax payable 0 54 000 5 580 000 4 440 000 ADDITIONAL INFORMATION All purchases and sales are on credit. Interim dividends paid during the year amounted to R150 750. Credit terms of 3/10 net 60 days are granted by creditors.

Accounting Question

REQUIRED Study the information given below and answer the following questions. Where discount factors are required use only the four decimals present value tables that appear after the formula sheet or in the module guide. Ignore taxes. 5.1 Calculate the Accounting Rate of Return on average investment of the second alternative (expressed to two decimal places). 5.2 Determine which of the two investment opportunities the company should choose by calculating the Net Present Value of each alternative. Your answer must include the calculation of the present values and NPV. 5.3 Calculate the Internal Rate of Return of the first alterative (expressed to two decimal places). Your answer must include two net present value calculations (using consecutive rates/percentages) and interpolation. INFORMATION The management of Bentall Incorporated is considering two investment opportunities: (5 marks) (9 marks) (6 marks) The first alternative involves the purchase of a new machine for R900 000 which…

Answer 2

Question

Chapter 2, Problem 2.22P

1.

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The Company’s CM ratio and the break-even point in unit sales and dollar sales

2.

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The increase/decrease in company’s net operating income.

3.

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The revised net operating income/loss.

4

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The number of units sold to attain a target profit of $9750.

5

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The new CM ratio along break-even point in unit sales and dollars sales.

5b

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

To prepare: Two contribution statements showing units and percentages.

5c

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

To evaluate: Whether the automation of the company’s operations is right or wrong.

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Answer 3

Question

Chapter 2, Problem 2.22P

1.

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The Company’s CM ratio and the break-even point in unit sales and dollar sales

2.

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The increase/decrease in company’s net operating income.

3.

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The revised net operating income/loss.

4

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The number of units sold to attain a target profit of $9750.

5

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The new CM ratio along break-even point in unit sales and dollars sales.

5b

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

To prepare: Two contribution statements showing units and percentages.

5c

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

To evaluate: Whether the automation of the company’s operations is right or wrong.

Expert Solution & Answer

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Answer 4

Question

Chapter 2, Problem 2.22P

1.

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The Company’s CM ratio and the break-even point in unit sales and dollar sales

2.

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The increase/decrease in company’s net operating income.

3.

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The revised net operating income/loss.

4

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The number of units sold to attain a target profit of $9750.

5

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The new CM ratio along break-even point in unit sales and dollars sales.

5b

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

To prepare: Two contribution statements showing units and percentages.

5c

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

To evaluate: Whether the automation of the company’s operations is right or wrong.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 2, Problem 2.22P

1.

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The Company’s CM ratio and the break-even point in unit sales and dollar sales

2.

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The increase/decrease in company’s net operating income.

3.

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The revised net operating income/loss.

4

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The number of units sold to attain a target profit of $9750.

5

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The new CM ratio along break-even point in unit sales and dollars sales.

5b

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

To prepare: Two contribution statements showing units and percentages.

5c

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

To evaluate: Whether the automation of the company’s operations is right or wrong.

Answer 6

Chapter 2, Problem 2.22P

1.

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The Company’s CM ratio and the break-even point in unit sales and dollar sales

Answer 7

Chapter 2, Problem 2.22P

1.

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The Company’s CM ratio and the break-even point in unit sales and dollar sales

Answer 8

2.

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The increase/decrease in company’s net operating income.

Answer 9

2.

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The increase/decrease in company’s net operating income.

Answer 10

3.

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The revised net operating income/loss.

Answer 11

3.

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The revised net operating income/loss.

Answer 12

4

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The number of units sold to attain a target profit of $9750.

Answer 13

4

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The number of units sold to attain a target profit of $9750.

Answer 14

5

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The new CM ratio along break-even point in unit sales and dollars sales.

Answer 15

5

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

The new CM ratio along break-even point in unit sales and dollars sales.

Answer 16

5b

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

To prepare: Two contribution statements showing units and percentages.

Answer 17

5b

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

To prepare: Two contribution statements showing units and percentages.

Answer 18

5c

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

To evaluate: Whether the automation of the company’s operations is right or wrong.

Answer 19

5c

To determine

Introduction:

Contribution margin: It is also known as gross margin. It is the value derived after deducting the variable expenses from the total sales value. It has one more feature. When the value of fixed expenses is deducted from the contribution margin, we can derive the net income.

To evaluate: Whether the automation of the company’s operations is right or wrong.

Answer 20

Expert Solution & Answer

Answer 21

Expert Solution & Answer

Answer 22

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Answer 23

Ch. 2 - Prob. 2.1Q Ch. 2 - Prob. 2.2Q Ch. 2 - Prob. 2.3Q Ch. 2 - Prob. 2.4Q Ch. 2 - Prob. 2.5Q Ch. 2 - Prob. 2.6Q Ch. 2 - Prob. 2.7Q Ch. 2 - Prob. 2.8Q Ch. 2 - Prob. 2.9Q Ch. 2 - Prob. 1AE

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Chapter 2 Solutions