Accounting
27th Edition
ISBN: 9781337272094
Author: WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher: Cengage Learning,
expand_more
expand_more
format_list_bulleted
Question
Chapter 21, Problem 21.18EX
(a)
To determine
Cost-Volume-Profit Analysis: It is a method followed to analyze the relationship between the sales, costs, and the related profit or loss at various levels of units sold. In other words, it shows the effect of the changes in the cost and the sales volume on the operating income of the company.
To determine: the maximum possible operating loss.
(b)
To determine
To compute: the maximum possible operating profit.
(c)
To determine
To construct: a cost-volume-profit chart.
(d)
To determine
To estimate: the break-even sales (units) by using the cost-volume-profit chart constructed in part (c).
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
a. Present a cost-profit-volume analysis that shows the effect of adding the $8,500 annual
premium to the company's fixed costs by showing current and revised CVP Income Statements.
Include a column to the right of each income statement where each line item is expressed as a
percentage of sales (called a common size income statement).
b. Visualize the changes to net income in a chart.
c. Advise the company using your quantitative support and qualitative. reasoning as to whether
the company should purchase the insurance.
A-Float Pools Company
Income Statement (Pools Maintenance Div.)
For the Year Ended December 31, 2022
In
Sales (2,000 clients)
Cost of Services
Gross profit
Operating expenses
Selling
Administrative
Net Income
$165,000
$225,000
$1,100,000
627,000
$473,000
$390,000
$83.000
In analyzing the financial statements which are given can you please compute the following ratios:
1.GROSS PROFIT RATE
2.RATE OF RETURN ON OWNER'S EQUITY
3. AVERAGE COLLECTION PERIOD
4. EARNINGS PER SHARE
5.BOOK VALUE PER SHARE
In analyzing the financial statements which
are given can you please compute the
following ratios:
1. EARNINGS PER SHARE
2.BOOK VALUE PER SHARE
3. MARKET PRICE TO BOOK VALUE PER SHARE
4.RECEIVABLE TURNOVER
5.AVERAGE COLLECTION PERIOD
Chapter 21 Solutions
Accounting
Ch. 21 - Describe how total variable costs and unit...Ch. 21 - How would the following costs be classified...Ch. 21 - Describe how total fixed costs and unit fixed...Ch. 21 - In applying the high-low method of cost estimation...Ch. 21 - If fixed costs Increase, what would be the impact...Ch. 21 - An examination of the accounting records of...Ch. 21 - Prob. 7DQCh. 21 - Both Austin Company and Hill Company had the same...Ch. 21 - How does the sales mix affect the calculation of...Ch. 21 - What does operating leverage measure, and how is...
Ch. 21 - High-low method The manufacturing costs of...Ch. 21 - High-low method The manufacturing costs of...Ch. 21 - Contribution margin Lanning Company sells 160,000...Ch. 21 - Contribution margin Weidner Company sells 22,000...Ch. 21 - Prob. 21.3APECh. 21 - Prob. 21.3BPECh. 21 - Prob. 21.4APECh. 21 - Prob. 21.4BPECh. 21 - Prob. 21.5APECh. 21 - Prob. 21.5BPECh. 21 - Operating leverage SungSam Enterprises reports the...Ch. 21 - Prob. 21.6BPECh. 21 - Margin of safety Liu Inc. has sales of 48,500,000,...Ch. 21 - Margin of safety Junck Company has sales of...Ch. 21 - Classify costs Following is a list of various...Ch. 21 - Identify cost graphs The following cost graphs...Ch. 21 - Prob. 21.3EXCh. 21 - Identify activity bases From the following list of...Ch. 21 - Identify fixed and variable costs Intuit Inc...Ch. 21 - Relevant range and fixed and variable costs Vogel...Ch. 21 - High-low method Ziegler Inc. has decided to use...Ch. 21 - High-low method for a service company Boston...Ch. 21 - Contribution margin ratio a. Yountz Company...Ch. 21 - Contribution margin and contribution margin ratio...Ch. 21 - Prob. 21.11EXCh. 21 - Break-even sales Anheuser-Busch InBev Companies,...Ch. 21 - Break even sales Currently, the unit .selling...Ch. 21 - Prob. 21.14EXCh. 21 - Prob. 21.15EXCh. 21 - Prob. 21.16EXCh. 21 - Prob. 21.17EXCh. 21 - Prob. 21.18EXCh. 21 - Prob. 21.19EXCh. 21 - Prob. 21.20EXCh. 21 - Prob. 21.21EXCh. 21 - Break-even sales and sales mix for a service...Ch. 21 - Margin of safety a. If Canace Company, with a...Ch. 21 - Prob. 21.24EXCh. 21 - Operating leverage Beck Inc. and Bryant Inc. have...Ch. 21 - Items on variable costing income statement In the...Ch. 21 - Variable costing income statement On July 31, the...Ch. 21 - Appendix Absorption costing income statement On...Ch. 21 - Classify costs Seymour Clothing Co. manufactures a...Ch. 21 - Prob. 21.2APRCh. 21 - Prob. 21.3APRCh. 21 - Prob. 21.4APRCh. 21 - Sales mix and break-even sales Data related to the...Ch. 21 - Contribution margin, break-even sales,...Ch. 21 - Classify costs Cromwell Furniture Company...Ch. 21 - Prob. 21.2BPRCh. 21 - Break-even sales and cost-volume-profit chart For...Ch. 21 - Prob. 21.4BPRCh. 21 - Prob. 21.5BPRCh. 21 - Contribution margin, break-even sales,...Ch. 21 - Prob. 21.1CPCh. 21 - Communication Sun Airlines is a commercial airline...Ch. 21 - Break-even analysis Somerset Inc. has finished a...Ch. 21 - Variable costs and activity bases in decision...Ch. 21 - Variable costs and activity bases in decision...
Knowledge Booster
Similar questions
- Prepare a basic income statement forecast for the subsequent fiscal year, using a percentage of sales approach and using information included in the materials below to support assumptions that correspond for each revenue and expense. Each line item (e.g., marketing expenses) should have a note and an explanation on how it was calculated.arrow_forwardthen the gross profit margin M = M(G, T) is given by the formula M = GT. Use functional notation to express the gross profit margin for a company that has a gross profit of $355,000 and a total revenue of $510,000arrow_forwardProfit Margin, Investment Turnover, and ROI Briggs Company has income from operations of $132,756, invested assets of $299,000, and sales of $1,106,300. Use the DuPont formula to compute the return on investment. If required, round your answers to two decimal places. a. Profit margin % b. Investment turnover c. Return on investment %arrow_forward
- First step - you need to understand each individual components of the income statement (also called a Profit & Loss Statement or P&L Statement): Sales (Revenue) The sales figure represents the amount of revenue generated by the business. It is calculated as the total of the number of units sold multiplied by the selling price per unit. The amount recorded here is the total sales, minus any product returns or sales discounts. Cost of Goods Sold This number represents the costs directly associated with making or acquiring your products. Costs include materials purchased from outside suppliers used in the manufacture of your product, as well as any internal expenses directly expended in the manufacturing process. In a service business where you, as the owner, are the only expense in supplying the service, and you do not pay yourself a salary beyond the company profits, your service expense may be zero. However, in a service business where you pay yourself a salary or have…arrow_forwardGiven the profit loss (income statement) and balance sheet for Sam’sSandwich Delivery (Table 4–8), answer the following:a. Calculate the current and quick ratios.b. Using the inventory figure on the balance sheet as average inventory, calculatethe inventory turnover ratio.c. Calculate the debt-to-equity ratio, debt-to-total-asset ratio, and operatingprofit margin ratio.d. Perform a vertical analysis of the income statement.e. Perform a vertical analysis of the balance sheet.f. Based on your analysis, would you consider investing in Sam’s SandwichDelivery?arrow_forwardProfit Margin, Investment Turnover, and ROI Briggs Company has operating income of $72,576, invested assets of $224,000, and sales of $806,400. Use the DuPont formula to compute the return on investment. If required, round your answers to two decimal places. a. Profit margin % b. Investment turnover c. Return on investment %arrow_forward
- Margin, Turnover, Return on Investment Pelak Company had sales of $4,945,000, expenses of $4,566,000, and average operating assets of $3,690,000. Required: 1. Compute the operating income. $ 2. Compute the margin (as a percent) and turnover ratio. If required, round your answers to one decimal place. Margin Turnover % 3. Compute the ROI as a percent. Use the part 2 final answers in these calculations and round the final answer to two decimal places. %arrow_forwardpractice please help with formulaarrow_forwardDirection: Answer the problem below and forecasts the income statement using percent of sales method. (Please refer to the picture)arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Survey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage Learning
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax CollegePrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning