Breakeven point- Breakeven point is the point where total revenues are equal to total costs. Total cost includes fixed costs as well as variable costs. It is calculated as follows- B r e a k e v e n p o i n t i n s a l e s d o l l a r s = F i x e d c o s t s / C o n t r i b u t i o n m a r g i n r a t i o Requirement 1-: To compute: Break even points in sales dollars.

Question

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Answer 1

Question

Chapter 21, Problem 4BPSB

To determine

Concept Introduction:

Breakeven point-

Breakeven point is the point where total revenues are equal to total costs. Total cost includes fixed costs as well as variable costs. It is calculated as follows-

Breakeven point in sales dollars = Fixed costs / Contribution margin ratio

Requirement 1-:

To compute:

Break even points in sales dollars.

Expert Solution

Answer to Problem 4BPSB

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $200,000 20% Breakeven point in sales dollars =$1,000,000

Explanation of Solution

Given,

Fixed costs = $200,000
Sales = $750,000
Contribution margin = $150,000

Contribution margin ratio = Contribution margin / SalesContribution margin ratio = $150,000 / $750,000Contribution margin ratio = 20%

Breakeven point is calculated as follows-

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $200,000 20% Breakeven point in sales dollars =$1,000,000

Conclusion:

Thus, breakeven point in sales dollars is calculated.

To determine

Concept Introduction:

Breakeven point-

Breakeven point is the point where total revenues are equal to total costs. Total cost includes fixed costs as well as variable costs. It is calculated as follows-

Breakeven point in sales dollars = Fixed costs / Contribution margin ratio

Requirement 2-:

To compute:

Break even points in sales dollars.

Expert Solution

Answer to Problem 4BPSB

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $350,000 60% Breakeven point in sales dollars =$583,333

Explanation of Solution

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

First we need to find revised variable costs-

Revised variable costs = Variable costs – 50% * Variable costsRevised variable costs = $600,000 – ( 50% * $600,000)Revised variable costs = $600,000 − $300,000Revised variable costs =$300,000

Then, we need to find revised contribution margin-

Revised contribution margin = Sales − Revised variable costsRevised contribution margin = $750,000 − $300,000Revised contribution margin = $450,000

Contribution margin ratio is calculated as follows-

Contribution margin ratio = Revised contribution margin / SalesContribution margin ratio = $450,000 / $750,000Contribution margin ratio = 60%

Breakeven point is calculated as follows-

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $350,000 60% Breakeven point in sales dollars =$583,333

Conclusion:

Thus, breakeven point in sales dollars is calculated.

To determine

Concept Introduction:

Contribution margin income statement-

It is a statement wherein all the variable costs are deducted from the sales to get the contribution margin and after getting contribution margin, fixed expenses are deducted from contribution margin to get net income or loss.

Requirement 3-:

To prepare:

Forecasted contribution margin income statement.

Expert Solution

Answer to Problem 4BPSB

Rivera Company
Forecasted contribution margin income statement

Particulars	Amount ($)
Sales	750,000
Variable costs	(300,000)
Contribution margin	450,000
Fixed costs	(350,000)
Net income	100,000

Explanation of Solution

First we need to find revised fixed costs-

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Then, we need to find revised variable costs

Revised variable costs = Variable costs – 50% * Variable costsRevised variable costs = $600,000 – ( 50% * $600,000)Revised variable costs = $600,000 − $300,000Revised variable costs =$300,000

Then, we need to find revised contribution margin-

Revised contribution margin = Sales − Revised variable costsRevised contribution margin = $750,000 − $300,000Revised contribution margin = $450,000

Net income is calculates as follows-

Net income = Contribution margin – Fixed costsNet income = $450,000 − $350,000Net income = $100,000

Conclusion:

Thus, contribution margin income statement is prepared.

To determine

Concept Introduction:

Breakeven point-

Breakeven point is the point where total revenues are equal to total costs. Total cost includes fixed costs as well as variable costs.

Requirement 4-:

To compute:

Break even points in sales dollars and in sales units to earn a targeted profit

Expert Solution

Answer to Problem 4BPSB

Break even points in sales dollars = ( Fixed costs + Pretax income)/ Contribution margin ratioBreak even points in sales dollars = ( $350,000+$200,000) / 60%Break even points in sales dollars = $550,000/60%Break even points in sales dollars = $916,667

Break even points in sales units = ( Fixed costs + Pretax income)/ Contribution margin Break even points in sales units = ( $350,000+$200,000) / $22.5Break even points in sales units = $550,000/$22.5Break even points in sales units = 24,445units

Explanation of Solution

Breakeven point in sales dollars-

First we need to find revised fixed costs-

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Then, we need to find revised variable costs

Revised variable costs = Variable costs – 50% * Variable costsRevised variable costs = $600,000 – ( 50% * $600,000)Revised variable costs = $600,000 − $300,000Revised variable costs =$300,000

Then, we need to find revised contribution margin-

Revised contribution margin = Sales − Revised variable costsRevised contribution margin = $750,000 − $300,000Revised contribution margin = $450,000

Contribution margin ratio is calculated as follows-

Contribution margin ratio = Revised contribution margin / SalesContribution margin ratio = $450,000 / $750,000Contribution margin ratio = 60%

Breakeven point in sales dollars is calculated as under-

Break even points in sales dollars = ( Fixed costs + Pretax income)/ Contribution margin ratioBreak even points in sales dollars = ( $350,000+$200,000) / 60%Break even points in sales dollars = $550,000/60%Break even points in sales dollars = $916,667

Breakeven point in sales units-

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Contribution margin per unit is calculated as under-

Contribution margin per unit = Total contribution margin / Sales unitsContribution margin per unit = $450,000 / 20,000Contribution margin per unit = $22.5

Breakeven point in sales units is calculated as follows-

Break even points in sales units = ( Fixed costs + Pretax income)/ Contribution margin Break even points in sales units = ( $350,000+$200,000) / $22.5Break even points in sales units = $550,000/$22.5Break even points in sales units = 24,445units

Conclusion:

Thus, breakeven point in sales units and sales dollars is calculated.

To determine

Concept Introduction:

Contribution margin income statement-

It is a statement wherein all the variable costs are deducted from the sales to get the contribution margin and after getting contribution margin, fixed expenses are deducted from contribution margin to get net income or loss.

Requirement 5-:

To prepare:

Forecasted contribution margin income statement.

Expert Solution

Answer to Problem 4BPSB

Rivera Company
Forecasted contribution margin income statement

Particulars	Amount ($)
Sales	916,688
Variable costs	(366,675)
Contribution margin	550,013
Fixed costs	(350,000)
Net income	200,013

Explanation of Solution

Sales price per unit = $750,000/20,000 unitsSales price per unit =$37.5Sales at breakeven = 24,445 units * $37.5Sales at breakeven = $916,688

Variable costs per unit = $300,000 / 20,000 unitsVariable costs per unit = $15Variable costs at breakeven = 24,445 * $15Variable costs at breakeven = $366,675

Contribution margin = Sales – Variable costsContribution margin = $916,688 − $366,675Contribution margin = $550,013

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Net income is calculated as follows-

Net income = Contribution margin – Fixed costsNet income = $550,013 − $350,000Net income = $200,013

Conclusion:

Thus, contribution margin income statement is prepared.

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Answer 2

Question

Chapter 21, Problem 4BPSB

To determine

Concept Introduction:

Breakeven point-

Breakeven point is the point where total revenues are equal to total costs. Total cost includes fixed costs as well as variable costs. It is calculated as follows-

Breakeven point in sales dollars = Fixed costs / Contribution margin ratio

Requirement 1-:

To compute:

Break even points in sales dollars.

Expert Solution

Answer to Problem 4BPSB

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $200,000 20% Breakeven point in sales dollars =$1,000,000

Explanation of Solution

Given,

Fixed costs = $200,000
Sales = $750,000
Contribution margin = $150,000

Contribution margin ratio = Contribution margin / SalesContribution margin ratio = $150,000 / $750,000Contribution margin ratio = 20%

Breakeven point is calculated as follows-

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $200,000 20% Breakeven point in sales dollars =$1,000,000

Conclusion:

Thus, breakeven point in sales dollars is calculated.

To determine

Concept Introduction:

Breakeven point-

Breakeven point is the point where total revenues are equal to total costs. Total cost includes fixed costs as well as variable costs. It is calculated as follows-

Breakeven point in sales dollars = Fixed costs / Contribution margin ratio

Requirement 2-:

To compute:

Break even points in sales dollars.

Expert Solution

Answer to Problem 4BPSB

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $350,000 60% Breakeven point in sales dollars =$583,333

Explanation of Solution

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

First we need to find revised variable costs-

Revised variable costs = Variable costs – 50% * Variable costsRevised variable costs = $600,000 – ( 50% * $600,000)Revised variable costs = $600,000 − $300,000Revised variable costs =$300,000

Then, we need to find revised contribution margin-

Revised contribution margin = Sales − Revised variable costsRevised contribution margin = $750,000 − $300,000Revised contribution margin = $450,000

Contribution margin ratio is calculated as follows-

Contribution margin ratio = Revised contribution margin / SalesContribution margin ratio = $450,000 / $750,000Contribution margin ratio = 60%

Breakeven point is calculated as follows-

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $350,000 60% Breakeven point in sales dollars =$583,333

Conclusion:

Thus, breakeven point in sales dollars is calculated.

To determine

Concept Introduction:

Contribution margin income statement-

It is a statement wherein all the variable costs are deducted from the sales to get the contribution margin and after getting contribution margin, fixed expenses are deducted from contribution margin to get net income or loss.

Requirement 3-:

To prepare:

Forecasted contribution margin income statement.

Expert Solution

Answer to Problem 4BPSB

Rivera Company
Forecasted contribution margin income statement

Particulars	Amount ($)
Sales	750,000
Variable costs	(300,000)
Contribution margin	450,000
Fixed costs	(350,000)
Net income	100,000

Explanation of Solution

First we need to find revised fixed costs-

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Then, we need to find revised variable costs

Revised variable costs = Variable costs – 50% * Variable costsRevised variable costs = $600,000 – ( 50% * $600,000)Revised variable costs = $600,000 − $300,000Revised variable costs =$300,000

Then, we need to find revised contribution margin-

Revised contribution margin = Sales − Revised variable costsRevised contribution margin = $750,000 − $300,000Revised contribution margin = $450,000

Net income is calculates as follows-

Net income = Contribution margin – Fixed costsNet income = $450,000 − $350,000Net income = $100,000

Conclusion:

Thus, contribution margin income statement is prepared.

To determine

Concept Introduction:

Breakeven point-

Breakeven point is the point where total revenues are equal to total costs. Total cost includes fixed costs as well as variable costs.

Requirement 4-:

To compute:

Break even points in sales dollars and in sales units to earn a targeted profit

Expert Solution

Answer to Problem 4BPSB

Break even points in sales dollars = ( Fixed costs + Pretax income)/ Contribution margin ratioBreak even points in sales dollars = ( $350,000+$200,000) / 60%Break even points in sales dollars = $550,000/60%Break even points in sales dollars = $916,667

Break even points in sales units = ( Fixed costs + Pretax income)/ Contribution margin Break even points in sales units = ( $350,000+$200,000) / $22.5Break even points in sales units = $550,000/$22.5Break even points in sales units = 24,445units

Explanation of Solution

Breakeven point in sales dollars-

First we need to find revised fixed costs-

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Then, we need to find revised variable costs

Revised variable costs = Variable costs – 50% * Variable costsRevised variable costs = $600,000 – ( 50% * $600,000)Revised variable costs = $600,000 − $300,000Revised variable costs =$300,000

Then, we need to find revised contribution margin-

Revised contribution margin = Sales − Revised variable costsRevised contribution margin = $750,000 − $300,000Revised contribution margin = $450,000

Contribution margin ratio is calculated as follows-

Contribution margin ratio = Revised contribution margin / SalesContribution margin ratio = $450,000 / $750,000Contribution margin ratio = 60%

Breakeven point in sales dollars is calculated as under-

Break even points in sales dollars = ( Fixed costs + Pretax income)/ Contribution margin ratioBreak even points in sales dollars = ( $350,000+$200,000) / 60%Break even points in sales dollars = $550,000/60%Break even points in sales dollars = $916,667

Breakeven point in sales units-

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Contribution margin per unit is calculated as under-

Contribution margin per unit = Total contribution margin / Sales unitsContribution margin per unit = $450,000 / 20,000Contribution margin per unit = $22.5

Breakeven point in sales units is calculated as follows-

Break even points in sales units = ( Fixed costs + Pretax income)/ Contribution margin Break even points in sales units = ( $350,000+$200,000) / $22.5Break even points in sales units = $550,000/$22.5Break even points in sales units = 24,445units

Conclusion:

Thus, breakeven point in sales units and sales dollars is calculated.

To determine

Concept Introduction:

Contribution margin income statement-

It is a statement wherein all the variable costs are deducted from the sales to get the contribution margin and after getting contribution margin, fixed expenses are deducted from contribution margin to get net income or loss.

Requirement 5-:

To prepare:

Forecasted contribution margin income statement.

Expert Solution

Answer to Problem 4BPSB

Rivera Company
Forecasted contribution margin income statement

Particulars	Amount ($)
Sales	916,688
Variable costs	(366,675)
Contribution margin	550,013
Fixed costs	(350,000)
Net income	200,013

Explanation of Solution

Sales price per unit = $750,000/20,000 unitsSales price per unit =$37.5Sales at breakeven = 24,445 units * $37.5Sales at breakeven = $916,688

Variable costs per unit = $300,000 / 20,000 unitsVariable costs per unit = $15Variable costs at breakeven = 24,445 * $15Variable costs at breakeven = $366,675

Contribution margin = Sales – Variable costsContribution margin = $916,688 − $366,675Contribution margin = $550,013

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Net income is calculated as follows-

Net income = Contribution margin – Fixed costsNet income = $550,013 − $350,000Net income = $200,013

Conclusion:

Thus, contribution margin income statement is prepared.

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Answer 3

Question

Chapter 21, Problem 4BPSB

To determine

Concept Introduction:

Breakeven point-

Breakeven point is the point where total revenues are equal to total costs. Total cost includes fixed costs as well as variable costs. It is calculated as follows-

Breakeven point in sales dollars = Fixed costs / Contribution margin ratio

Requirement 1-:

To compute:

Break even points in sales dollars.

Expert Solution

Answer to Problem 4BPSB

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $200,000 20% Breakeven point in sales dollars =$1,000,000

Explanation of Solution

Given,

Fixed costs = $200,000
Sales = $750,000
Contribution margin = $150,000

Contribution margin ratio = Contribution margin / SalesContribution margin ratio = $150,000 / $750,000Contribution margin ratio = 20%

Breakeven point is calculated as follows-

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $200,000 20% Breakeven point in sales dollars =$1,000,000

Conclusion:

Thus, breakeven point in sales dollars is calculated.

To determine

Concept Introduction:

Breakeven point-

Breakeven point is the point where total revenues are equal to total costs. Total cost includes fixed costs as well as variable costs. It is calculated as follows-

Breakeven point in sales dollars = Fixed costs / Contribution margin ratio

Requirement 2-:

To compute:

Break even points in sales dollars.

Expert Solution

Answer to Problem 4BPSB

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $350,000 60% Breakeven point in sales dollars =$583,333

Explanation of Solution

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

First we need to find revised variable costs-

Revised variable costs = Variable costs – 50% * Variable costsRevised variable costs = $600,000 – ( 50% * $600,000)Revised variable costs = $600,000 − $300,000Revised variable costs =$300,000

Then, we need to find revised contribution margin-

Revised contribution margin = Sales − Revised variable costsRevised contribution margin = $750,000 − $300,000Revised contribution margin = $450,000

Contribution margin ratio is calculated as follows-

Contribution margin ratio = Revised contribution margin / SalesContribution margin ratio = $450,000 / $750,000Contribution margin ratio = 60%

Breakeven point is calculated as follows-

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $350,000 60% Breakeven point in sales dollars =$583,333

Conclusion:

Thus, breakeven point in sales dollars is calculated.

To determine

Concept Introduction:

Contribution margin income statement-

It is a statement wherein all the variable costs are deducted from the sales to get the contribution margin and after getting contribution margin, fixed expenses are deducted from contribution margin to get net income or loss.

Requirement 3-:

To prepare:

Forecasted contribution margin income statement.

Expert Solution

Answer to Problem 4BPSB

Rivera Company
Forecasted contribution margin income statement

Particulars	Amount ($)
Sales	750,000
Variable costs	(300,000)
Contribution margin	450,000
Fixed costs	(350,000)
Net income	100,000

Explanation of Solution

First we need to find revised fixed costs-

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Then, we need to find revised variable costs

Revised variable costs = Variable costs – 50% * Variable costsRevised variable costs = $600,000 – ( 50% * $600,000)Revised variable costs = $600,000 − $300,000Revised variable costs =$300,000

Then, we need to find revised contribution margin-

Revised contribution margin = Sales − Revised variable costsRevised contribution margin = $750,000 − $300,000Revised contribution margin = $450,000

Net income is calculates as follows-

Net income = Contribution margin – Fixed costsNet income = $450,000 − $350,000Net income = $100,000

Conclusion:

Thus, contribution margin income statement is prepared.

To determine

Concept Introduction:

Breakeven point-

Breakeven point is the point where total revenues are equal to total costs. Total cost includes fixed costs as well as variable costs.

Requirement 4-:

To compute:

Break even points in sales dollars and in sales units to earn a targeted profit

Expert Solution

Answer to Problem 4BPSB

Break even points in sales dollars = ( Fixed costs + Pretax income)/ Contribution margin ratioBreak even points in sales dollars = ( $350,000+$200,000) / 60%Break even points in sales dollars = $550,000/60%Break even points in sales dollars = $916,667

Break even points in sales units = ( Fixed costs + Pretax income)/ Contribution margin Break even points in sales units = ( $350,000+$200,000) / $22.5Break even points in sales units = $550,000/$22.5Break even points in sales units = 24,445units

Explanation of Solution

Breakeven point in sales dollars-

First we need to find revised fixed costs-

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Then, we need to find revised variable costs

Revised variable costs = Variable costs – 50% * Variable costsRevised variable costs = $600,000 – ( 50% * $600,000)Revised variable costs = $600,000 − $300,000Revised variable costs =$300,000

Then, we need to find revised contribution margin-

Revised contribution margin = Sales − Revised variable costsRevised contribution margin = $750,000 − $300,000Revised contribution margin = $450,000

Contribution margin ratio is calculated as follows-

Contribution margin ratio = Revised contribution margin / SalesContribution margin ratio = $450,000 / $750,000Contribution margin ratio = 60%

Breakeven point in sales dollars is calculated as under-

Break even points in sales dollars = ( Fixed costs + Pretax income)/ Contribution margin ratioBreak even points in sales dollars = ( $350,000+$200,000) / 60%Break even points in sales dollars = $550,000/60%Break even points in sales dollars = $916,667

Breakeven point in sales units-

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Contribution margin per unit is calculated as under-

Contribution margin per unit = Total contribution margin / Sales unitsContribution margin per unit = $450,000 / 20,000Contribution margin per unit = $22.5

Breakeven point in sales units is calculated as follows-

Break even points in sales units = ( Fixed costs + Pretax income)/ Contribution margin Break even points in sales units = ( $350,000+$200,000) / $22.5Break even points in sales units = $550,000/$22.5Break even points in sales units = 24,445units

Conclusion:

Thus, breakeven point in sales units and sales dollars is calculated.

To determine

Concept Introduction:

Contribution margin income statement-

It is a statement wherein all the variable costs are deducted from the sales to get the contribution margin and after getting contribution margin, fixed expenses are deducted from contribution margin to get net income or loss.

Requirement 5-:

To prepare:

Forecasted contribution margin income statement.

Expert Solution

Answer to Problem 4BPSB

Rivera Company
Forecasted contribution margin income statement

Particulars	Amount ($)
Sales	916,688
Variable costs	(366,675)
Contribution margin	550,013
Fixed costs	(350,000)
Net income	200,013

Explanation of Solution

Sales price per unit = $750,000/20,000 unitsSales price per unit =$37.5Sales at breakeven = 24,445 units * $37.5Sales at breakeven = $916,688

Variable costs per unit = $300,000 / 20,000 unitsVariable costs per unit = $15Variable costs at breakeven = 24,445 * $15Variable costs at breakeven = $366,675

Contribution margin = Sales – Variable costsContribution margin = $916,688 − $366,675Contribution margin = $550,013

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Net income is calculated as follows-

Net income = Contribution margin – Fixed costsNet income = $550,013 − $350,000Net income = $200,013

Conclusion:

Thus, contribution margin income statement is prepared.

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Answer 4

Question

Chapter 21, Problem 4BPSB

To determine

Concept Introduction:

Breakeven point-

Breakeven point is the point where total revenues are equal to total costs. Total cost includes fixed costs as well as variable costs. It is calculated as follows-

Breakeven point in sales dollars = Fixed costs / Contribution margin ratio

Requirement 1-:

To compute:

Break even points in sales dollars.

Expert Solution

Answer to Problem 4BPSB

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $200,000 20% Breakeven point in sales dollars =$1,000,000

Explanation of Solution

Given,

Fixed costs = $200,000
Sales = $750,000
Contribution margin = $150,000

Contribution margin ratio = Contribution margin / SalesContribution margin ratio = $150,000 / $750,000Contribution margin ratio = 20%

Breakeven point is calculated as follows-

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $200,000 20% Breakeven point in sales dollars =$1,000,000

Conclusion:

Thus, breakeven point in sales dollars is calculated.

To determine

Concept Introduction:

Breakeven point-

Breakeven point is the point where total revenues are equal to total costs. Total cost includes fixed costs as well as variable costs. It is calculated as follows-

Breakeven point in sales dollars = Fixed costs / Contribution margin ratio

Requirement 2-:

To compute:

Break even points in sales dollars.

Expert Solution

Answer to Problem 4BPSB

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $350,000 60% Breakeven point in sales dollars =$583,333

Explanation of Solution

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

First we need to find revised variable costs-

Revised variable costs = Variable costs – 50% * Variable costsRevised variable costs = $600,000 – ( 50% * $600,000)Revised variable costs = $600,000 − $300,000Revised variable costs =$300,000

Then, we need to find revised contribution margin-

Revised contribution margin = Sales − Revised variable costsRevised contribution margin = $750,000 − $300,000Revised contribution margin = $450,000

Contribution margin ratio is calculated as follows-

Contribution margin ratio = Revised contribution margin / SalesContribution margin ratio = $450,000 / $750,000Contribution margin ratio = 60%

Breakeven point is calculated as follows-

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $350,000 60% Breakeven point in sales dollars =$583,333

Conclusion:

Thus, breakeven point in sales dollars is calculated.

To determine

Concept Introduction:

Contribution margin income statement-

It is a statement wherein all the variable costs are deducted from the sales to get the contribution margin and after getting contribution margin, fixed expenses are deducted from contribution margin to get net income or loss.

Requirement 3-:

To prepare:

Forecasted contribution margin income statement.

Expert Solution

Answer to Problem 4BPSB

Rivera Company
Forecasted contribution margin income statement

Particulars	Amount ($)
Sales	750,000
Variable costs	(300,000)
Contribution margin	450,000
Fixed costs	(350,000)
Net income	100,000

Explanation of Solution

First we need to find revised fixed costs-

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Then, we need to find revised variable costs

Revised variable costs = Variable costs – 50% * Variable costsRevised variable costs = $600,000 – ( 50% * $600,000)Revised variable costs = $600,000 − $300,000Revised variable costs =$300,000

Then, we need to find revised contribution margin-

Revised contribution margin = Sales − Revised variable costsRevised contribution margin = $750,000 − $300,000Revised contribution margin = $450,000

Net income is calculates as follows-

Net income = Contribution margin – Fixed costsNet income = $450,000 − $350,000Net income = $100,000

Conclusion:

Thus, contribution margin income statement is prepared.

To determine

Concept Introduction:

Breakeven point-

Breakeven point is the point where total revenues are equal to total costs. Total cost includes fixed costs as well as variable costs.

Requirement 4-:

To compute:

Break even points in sales dollars and in sales units to earn a targeted profit

Expert Solution

Answer to Problem 4BPSB

Break even points in sales dollars = ( Fixed costs + Pretax income)/ Contribution margin ratioBreak even points in sales dollars = ( $350,000+$200,000) / 60%Break even points in sales dollars = $550,000/60%Break even points in sales dollars = $916,667

Break even points in sales units = ( Fixed costs + Pretax income)/ Contribution margin Break even points in sales units = ( $350,000+$200,000) / $22.5Break even points in sales units = $550,000/$22.5Break even points in sales units = 24,445units

Explanation of Solution

Breakeven point in sales dollars-

First we need to find revised fixed costs-

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Then, we need to find revised variable costs

Revised variable costs = Variable costs – 50% * Variable costsRevised variable costs = $600,000 – ( 50% * $600,000)Revised variable costs = $600,000 − $300,000Revised variable costs =$300,000

Then, we need to find revised contribution margin-

Revised contribution margin = Sales − Revised variable costsRevised contribution margin = $750,000 − $300,000Revised contribution margin = $450,000

Contribution margin ratio is calculated as follows-

Contribution margin ratio = Revised contribution margin / SalesContribution margin ratio = $450,000 / $750,000Contribution margin ratio = 60%

Breakeven point in sales dollars is calculated as under-

Break even points in sales dollars = ( Fixed costs + Pretax income)/ Contribution margin ratioBreak even points in sales dollars = ( $350,000+$200,000) / 60%Break even points in sales dollars = $550,000/60%Break even points in sales dollars = $916,667

Breakeven point in sales units-

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Contribution margin per unit is calculated as under-

Contribution margin per unit = Total contribution margin / Sales unitsContribution margin per unit = $450,000 / 20,000Contribution margin per unit = $22.5

Breakeven point in sales units is calculated as follows-

Break even points in sales units = ( Fixed costs + Pretax income)/ Contribution margin Break even points in sales units = ( $350,000+$200,000) / $22.5Break even points in sales units = $550,000/$22.5Break even points in sales units = 24,445units

Conclusion:

Thus, breakeven point in sales units and sales dollars is calculated.

To determine

Concept Introduction:

Contribution margin income statement-

It is a statement wherein all the variable costs are deducted from the sales to get the contribution margin and after getting contribution margin, fixed expenses are deducted from contribution margin to get net income or loss.

Requirement 5-:

To prepare:

Forecasted contribution margin income statement.

Expert Solution

Answer to Problem 4BPSB

Rivera Company
Forecasted contribution margin income statement

Particulars	Amount ($)
Sales	916,688
Variable costs	(366,675)
Contribution margin	550,013
Fixed costs	(350,000)
Net income	200,013

Explanation of Solution

Sales price per unit = $750,000/20,000 unitsSales price per unit =$37.5Sales at breakeven = 24,445 units * $37.5Sales at breakeven = $916,688

Variable costs per unit = $300,000 / 20,000 unitsVariable costs per unit = $15Variable costs at breakeven = 24,445 * $15Variable costs at breakeven = $366,675

Contribution margin = Sales – Variable costsContribution margin = $916,688 − $366,675Contribution margin = $550,013

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Net income is calculated as follows-

Net income = Contribution margin – Fixed costsNet income = $550,013 − $350,000Net income = $200,013

Conclusion:

Thus, contribution margin income statement is prepared.

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Answer 5

Chapter 21, Problem 4BPSB

To determine

Concept Introduction:

Breakeven point-

Breakeven point is the point where total revenues are equal to total costs. Total cost includes fixed costs as well as variable costs. It is calculated as follows-

Breakeven point in sales dollars = Fixed costs / Contribution margin ratio

Requirement 1-:

To compute:

Break even points in sales dollars.

Expert Solution

Answer to Problem 4BPSB

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $200,000 20% Breakeven point in sales dollars =$1,000,000

Explanation of Solution

Given,

Fixed costs = $200,000
Sales = $750,000
Contribution margin = $150,000

Contribution margin ratio = Contribution margin / SalesContribution margin ratio = $150,000 / $750,000Contribution margin ratio = 20%

Breakeven point is calculated as follows-

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $200,000 20% Breakeven point in sales dollars =$1,000,000

Conclusion:

Thus, breakeven point in sales dollars is calculated.

To determine

Concept Introduction:

Breakeven point-

Breakeven point is the point where total revenues are equal to total costs. Total cost includes fixed costs as well as variable costs. It is calculated as follows-

Breakeven point in sales dollars = Fixed costs / Contribution margin ratio

Requirement 2-:

To compute:

Break even points in sales dollars.

Expert Solution

Answer to Problem 4BPSB

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $350,000 60% Breakeven point in sales dollars =$583,333

Explanation of Solution

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

First we need to find revised variable costs-

Revised variable costs = Variable costs – 50% * Variable costsRevised variable costs = $600,000 – ( 50% * $600,000)Revised variable costs = $600,000 − $300,000Revised variable costs =$300,000

Then, we need to find revised contribution margin-

Revised contribution margin = Sales − Revised variable costsRevised contribution margin = $750,000 − $300,000Revised contribution margin = $450,000

Contribution margin ratio is calculated as follows-

Contribution margin ratio = Revised contribution margin / SalesContribution margin ratio = $450,000 / $750,000Contribution margin ratio = 60%

Breakeven point is calculated as follows-

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $350,000 60% Breakeven point in sales dollars =$583,333

Conclusion:

Thus, breakeven point in sales dollars is calculated.

To determine

Concept Introduction:

Contribution margin income statement-

It is a statement wherein all the variable costs are deducted from the sales to get the contribution margin and after getting contribution margin, fixed expenses are deducted from contribution margin to get net income or loss.

Requirement 3-:

To prepare:

Forecasted contribution margin income statement.

Expert Solution

Answer to Problem 4BPSB

Rivera Company
Forecasted contribution margin income statement

Particulars	Amount ($)
Sales	750,000
Variable costs	(300,000)
Contribution margin	450,000
Fixed costs	(350,000)
Net income	100,000

Explanation of Solution

First we need to find revised fixed costs-

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Then, we need to find revised variable costs

Revised variable costs = Variable costs – 50% * Variable costsRevised variable costs = $600,000 – ( 50% * $600,000)Revised variable costs = $600,000 − $300,000Revised variable costs =$300,000

Then, we need to find revised contribution margin-

Revised contribution margin = Sales − Revised variable costsRevised contribution margin = $750,000 − $300,000Revised contribution margin = $450,000

Net income is calculates as follows-

Net income = Contribution margin – Fixed costsNet income = $450,000 − $350,000Net income = $100,000

Conclusion:

Thus, contribution margin income statement is prepared.

To determine

Concept Introduction:

Breakeven point-

Breakeven point is the point where total revenues are equal to total costs. Total cost includes fixed costs as well as variable costs.

Requirement 4-:

To compute:

Break even points in sales dollars and in sales units to earn a targeted profit

Expert Solution

Answer to Problem 4BPSB

Break even points in sales dollars = ( Fixed costs + Pretax income)/ Contribution margin ratioBreak even points in sales dollars = ( $350,000+$200,000) / 60%Break even points in sales dollars = $550,000/60%Break even points in sales dollars = $916,667

Break even points in sales units = ( Fixed costs + Pretax income)/ Contribution margin Break even points in sales units = ( $350,000+$200,000) / $22.5Break even points in sales units = $550,000/$22.5Break even points in sales units = 24,445units

Explanation of Solution

Breakeven point in sales dollars-

First we need to find revised fixed costs-

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Then, we need to find revised variable costs

Revised variable costs = Variable costs – 50% * Variable costsRevised variable costs = $600,000 – ( 50% * $600,000)Revised variable costs = $600,000 − $300,000Revised variable costs =$300,000

Then, we need to find revised contribution margin-

Revised contribution margin = Sales − Revised variable costsRevised contribution margin = $750,000 − $300,000Revised contribution margin = $450,000

Contribution margin ratio is calculated as follows-

Contribution margin ratio = Revised contribution margin / SalesContribution margin ratio = $450,000 / $750,000Contribution margin ratio = 60%

Breakeven point in sales dollars is calculated as under-

Break even points in sales dollars = ( Fixed costs + Pretax income)/ Contribution margin ratioBreak even points in sales dollars = ( $350,000+$200,000) / 60%Break even points in sales dollars = $550,000/60%Break even points in sales dollars = $916,667

Breakeven point in sales units-

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Contribution margin per unit is calculated as under-

Contribution margin per unit = Total contribution margin / Sales unitsContribution margin per unit = $450,000 / 20,000Contribution margin per unit = $22.5

Breakeven point in sales units is calculated as follows-

Break even points in sales units = ( Fixed costs + Pretax income)/ Contribution margin Break even points in sales units = ( $350,000+$200,000) / $22.5Break even points in sales units = $550,000/$22.5Break even points in sales units = 24,445units

Conclusion:

Thus, breakeven point in sales units and sales dollars is calculated.

To determine

Concept Introduction:

Contribution margin income statement-

It is a statement wherein all the variable costs are deducted from the sales to get the contribution margin and after getting contribution margin, fixed expenses are deducted from contribution margin to get net income or loss.

Requirement 5-:

To prepare:

Forecasted contribution margin income statement.

Expert Solution

Answer to Problem 4BPSB

Rivera Company
Forecasted contribution margin income statement

Particulars	Amount ($)
Sales	916,688
Variable costs	(366,675)
Contribution margin	550,013
Fixed costs	(350,000)
Net income	200,013

Explanation of Solution

Sales price per unit = $750,000/20,000 unitsSales price per unit =$37.5Sales at breakeven = 24,445 units * $37.5Sales at breakeven = $916,688

Variable costs per unit = $300,000 / 20,000 unitsVariable costs per unit = $15Variable costs at breakeven = 24,445 * $15Variable costs at breakeven = $366,675

Contribution margin = Sales – Variable costsContribution margin = $916,688 − $366,675Contribution margin = $550,013

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Net income is calculated as follows-

Net income = Contribution margin – Fixed costsNet income = $550,013 − $350,000Net income = $200,013

Conclusion:

Thus, contribution margin income statement is prepared.

Answer 6

Chapter 21, Problem 4BPSB

To determine

Concept Introduction:

Breakeven point-

Breakeven point is the point where total revenues are equal to total costs. Total cost includes fixed costs as well as variable costs. It is calculated as follows-

Breakeven point in sales dollars = Fixed costs / Contribution margin ratio

Requirement 1-:

To compute:

Break even points in sales dollars.

Expert Solution

Answer to Problem 4BPSB

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $200,000 20% Breakeven point in sales dollars =$1,000,000

Explanation of Solution

Given,

Fixed costs = $200,000
Sales = $750,000
Contribution margin = $150,000

Contribution margin ratio = Contribution margin / SalesContribution margin ratio = $150,000 / $750,000Contribution margin ratio = 20%

Breakeven point is calculated as follows-

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $200,000 20% Breakeven point in sales dollars =$1,000,000

Conclusion:

Thus, breakeven point in sales dollars is calculated.

Answer 7

Chapter 21, Problem 4BPSB

To determine

Concept Introduction:

Breakeven point-

Breakeven point is the point where total revenues are equal to total costs. Total cost includes fixed costs as well as variable costs. It is calculated as follows-

Breakeven point in sales dollars = Fixed costs / Contribution margin ratio

Requirement 1-:

To compute:

Break even points in sales dollars.

Answer 8

Expert Solution

Answer to Problem 4BPSB

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $200,000 20% Breakeven point in sales dollars =$1,000,000

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

Given,

Fixed costs = $200,000
Sales = $750,000
Contribution margin = $150,000

Contribution margin ratio = Contribution margin / SalesContribution margin ratio = $150,000 / $750,000Contribution margin ratio = 20%

Breakeven point is calculated as follows-

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $200,000 20% Breakeven point in sales dollars =$1,000,000

Conclusion:

Thus, breakeven point in sales dollars is calculated.

Answer 13

To determine

Concept Introduction:

Breakeven point-

Breakeven point is the point where total revenues are equal to total costs. Total cost includes fixed costs as well as variable costs. It is calculated as follows-

Breakeven point in sales dollars = Fixed costs / Contribution margin ratio

Requirement 2-:

To compute:

Break even points in sales dollars.

Expert Solution

Answer to Problem 4BPSB

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $350,000 60% Breakeven point in sales dollars =$583,333

Explanation of Solution

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

First we need to find revised variable costs-

Revised variable costs = Variable costs – 50% * Variable costsRevised variable costs = $600,000 – ( 50% * $600,000)Revised variable costs = $600,000 − $300,000Revised variable costs =$300,000

Then, we need to find revised contribution margin-

Revised contribution margin = Sales − Revised variable costsRevised contribution margin = $750,000 − $300,000Revised contribution margin = $450,000

Contribution margin ratio is calculated as follows-

Contribution margin ratio = Revised contribution margin / SalesContribution margin ratio = $450,000 / $750,000Contribution margin ratio = 60%

Breakeven point is calculated as follows-

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $350,000 60% Breakeven point in sales dollars =$583,333

Conclusion:

Thus, breakeven point in sales dollars is calculated.

Answer 14

To determine

Concept Introduction:

Breakeven point-

Breakeven point is the point where total revenues are equal to total costs. Total cost includes fixed costs as well as variable costs. It is calculated as follows-

Breakeven point in sales dollars = Fixed costs / Contribution margin ratio

Requirement 2-:

To compute:

Break even points in sales dollars.

Answer 15

Expert Solution

Answer to Problem 4BPSB

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $350,000 60% Breakeven point in sales dollars =$583,333

Answer 16

Expert Solution

Answer 17

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

First we need to find revised variable costs-

Revised variable costs = Variable costs – 50% * Variable costsRevised variable costs = $600,000 – ( 50% * $600,000)Revised variable costs = $600,000 − $300,000Revised variable costs =$300,000

Then, we need to find revised contribution margin-

Revised contribution margin = Sales − Revised variable costsRevised contribution margin = $750,000 − $300,000Revised contribution margin = $450,000

Contribution margin ratio is calculated as follows-

Contribution margin ratio = Revised contribution margin / SalesContribution margin ratio = $450,000 / $750,000Contribution margin ratio = 60%

Breakeven point is calculated as follows-

Breakeven point in sales dollars = Fixed costs Contribution margin ratio Breakeven point in sales dollars = $350,000 60% Breakeven point in sales dollars =$583,333

Conclusion:

Thus, breakeven point in sales dollars is calculated.

Answer 20

To determine

Concept Introduction:

Contribution margin income statement-

It is a statement wherein all the variable costs are deducted from the sales to get the contribution margin and after getting contribution margin, fixed expenses are deducted from contribution margin to get net income or loss.

Requirement 3-:

To prepare:

Forecasted contribution margin income statement.

Expert Solution

Answer to Problem 4BPSB

Rivera Company
Forecasted contribution margin income statement

Particulars	Amount ($)
Sales	750,000
Variable costs	(300,000)
Contribution margin	450,000
Fixed costs	(350,000)
Net income	100,000

Explanation of Solution

First we need to find revised fixed costs-

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Then, we need to find revised variable costs

Revised variable costs = Variable costs – 50% * Variable costsRevised variable costs = $600,000 – ( 50% * $600,000)Revised variable costs = $600,000 − $300,000Revised variable costs =$300,000

Then, we need to find revised contribution margin-

Revised contribution margin = Sales − Revised variable costsRevised contribution margin = $750,000 − $300,000Revised contribution margin = $450,000

Net income is calculates as follows-

Net income = Contribution margin – Fixed costsNet income = $450,000 − $350,000Net income = $100,000

Conclusion:

Thus, contribution margin income statement is prepared.

Answer 21

To determine

Concept Introduction:

Contribution margin income statement-

It is a statement wherein all the variable costs are deducted from the sales to get the contribution margin and after getting contribution margin, fixed expenses are deducted from contribution margin to get net income or loss.

Requirement 3-:

To prepare:

Forecasted contribution margin income statement.

Answer 22

Expert Solution

Answer to Problem 4BPSB

Rivera Company
Forecasted contribution margin income statement

Particulars	Amount ($)
Sales	750,000
Variable costs	(300,000)
Contribution margin	450,000
Fixed costs	(350,000)
Net income	100,000

Answer 23

Expert Solution

Answer 24

Expert Solution

Answer 25

Expert Solution

Answer 26

Explanation of Solution

First we need to find revised fixed costs-

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Then, we need to find revised variable costs

Revised variable costs = Variable costs – 50% * Variable costsRevised variable costs = $600,000 – ( 50% * $600,000)Revised variable costs = $600,000 − $300,000Revised variable costs =$300,000

Then, we need to find revised contribution margin-

Revised contribution margin = Sales − Revised variable costsRevised contribution margin = $750,000 − $300,000Revised contribution margin = $450,000

Net income is calculates as follows-

Net income = Contribution margin – Fixed costsNet income = $450,000 − $350,000Net income = $100,000

Conclusion:

Thus, contribution margin income statement is prepared.

Answer 27

To determine

Concept Introduction:

Breakeven point-

Breakeven point is the point where total revenues are equal to total costs. Total cost includes fixed costs as well as variable costs.

Requirement 4-:

To compute:

Break even points in sales dollars and in sales units to earn a targeted profit

Expert Solution

Answer to Problem 4BPSB

Break even points in sales dollars = ( Fixed costs + Pretax income)/ Contribution margin ratioBreak even points in sales dollars = ( $350,000+$200,000) / 60%Break even points in sales dollars = $550,000/60%Break even points in sales dollars = $916,667

Break even points in sales units = ( Fixed costs + Pretax income)/ Contribution margin Break even points in sales units = ( $350,000+$200,000) / $22.5Break even points in sales units = $550,000/$22.5Break even points in sales units = 24,445units

Explanation of Solution

Breakeven point in sales dollars-

First we need to find revised fixed costs-

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Then, we need to find revised variable costs

Revised variable costs = Variable costs – 50% * Variable costsRevised variable costs = $600,000 – ( 50% * $600,000)Revised variable costs = $600,000 − $300,000Revised variable costs =$300,000

Then, we need to find revised contribution margin-

Revised contribution margin = Sales − Revised variable costsRevised contribution margin = $750,000 − $300,000Revised contribution margin = $450,000

Contribution margin ratio is calculated as follows-

Contribution margin ratio = Revised contribution margin / SalesContribution margin ratio = $450,000 / $750,000Contribution margin ratio = 60%

Breakeven point in sales dollars is calculated as under-

Break even points in sales dollars = ( Fixed costs + Pretax income)/ Contribution margin ratioBreak even points in sales dollars = ( $350,000+$200,000) / 60%Break even points in sales dollars = $550,000/60%Break even points in sales dollars = $916,667

Breakeven point in sales units-

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Contribution margin per unit is calculated as under-

Contribution margin per unit = Total contribution margin / Sales unitsContribution margin per unit = $450,000 / 20,000Contribution margin per unit = $22.5

Breakeven point in sales units is calculated as follows-

Break even points in sales units = ( Fixed costs + Pretax income)/ Contribution margin Break even points in sales units = ( $350,000+$200,000) / $22.5Break even points in sales units = $550,000/$22.5Break even points in sales units = 24,445units

Conclusion:

Thus, breakeven point in sales units and sales dollars is calculated.

Answer 28

To determine

Concept Introduction:

Breakeven point-

Breakeven point is the point where total revenues are equal to total costs. Total cost includes fixed costs as well as variable costs.

Requirement 4-:

To compute:

Break even points in sales dollars and in sales units to earn a targeted profit

Answer 29

Expert Solution

Answer to Problem 4BPSB

Break even points in sales dollars = ( Fixed costs + Pretax income)/ Contribution margin ratioBreak even points in sales dollars = ( $350,000+$200,000) / 60%Break even points in sales dollars = $550,000/60%Break even points in sales dollars = $916,667

Break even points in sales units = ( Fixed costs + Pretax income)/ Contribution margin Break even points in sales units = ( $350,000+$200,000) / $22.5Break even points in sales units = $550,000/$22.5Break even points in sales units = 24,445units

Answer 30

Expert Solution

Answer 31

Expert Solution

Answer 32

Expert Solution

Answer 33

Explanation of Solution

Breakeven point in sales dollars-

First we need to find revised fixed costs-

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Then, we need to find revised variable costs

Revised variable costs = Variable costs – 50% * Variable costsRevised variable costs = $600,000 – ( 50% * $600,000)Revised variable costs = $600,000 − $300,000Revised variable costs =$300,000

Then, we need to find revised contribution margin-

Revised contribution margin = Sales − Revised variable costsRevised contribution margin = $750,000 − $300,000Revised contribution margin = $450,000

Contribution margin ratio is calculated as follows-

Contribution margin ratio = Revised contribution margin / SalesContribution margin ratio = $450,000 / $750,000Contribution margin ratio = 60%

Breakeven point in sales dollars is calculated as under-

Break even points in sales dollars = ( Fixed costs + Pretax income)/ Contribution margin ratioBreak even points in sales dollars = ( $350,000+$200,000) / 60%Break even points in sales dollars = $550,000/60%Break even points in sales dollars = $916,667

Breakeven point in sales units-

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Contribution margin per unit is calculated as under-

Contribution margin per unit = Total contribution margin / Sales unitsContribution margin per unit = $450,000 / 20,000Contribution margin per unit = $22.5

Breakeven point in sales units is calculated as follows-

Break even points in sales units = ( Fixed costs + Pretax income)/ Contribution margin Break even points in sales units = ( $350,000+$200,000) / $22.5Break even points in sales units = $550,000/$22.5Break even points in sales units = 24,445units

Conclusion:

Thus, breakeven point in sales units and sales dollars is calculated.

Answer 34

To determine

Concept Introduction:

Contribution margin income statement-

It is a statement wherein all the variable costs are deducted from the sales to get the contribution margin and after getting contribution margin, fixed expenses are deducted from contribution margin to get net income or loss.

Requirement 5-:

To prepare:

Forecasted contribution margin income statement.

Expert Solution

Answer to Problem 4BPSB

Rivera Company
Forecasted contribution margin income statement

Particulars	Amount ($)
Sales	916,688
Variable costs	(366,675)
Contribution margin	550,013
Fixed costs	(350,000)
Net income	200,013

Explanation of Solution

Sales price per unit = $750,000/20,000 unitsSales price per unit =$37.5Sales at breakeven = 24,445 units * $37.5Sales at breakeven = $916,688

Variable costs per unit = $300,000 / 20,000 unitsVariable costs per unit = $15Variable costs at breakeven = 24,445 * $15Variable costs at breakeven = $366,675

Contribution margin = Sales – Variable costsContribution margin = $916,688 − $366,675Contribution margin = $550,013

Revised fixed costs = $200,000 + $150,000Revised fixed costs = $350,000

Net income is calculated as follows-

Net income = Contribution margin – Fixed costsNet income = $550,013 − $350,000Net income = $200,013

Conclusion:

Thus, contribution margin income statement is prepared.

Answer 35

To determine

Concept Introduction:

Contribution margin income statement-

It is a statement wherein all the variable costs are deducted from the sales to get the contribution margin and after getting contribution margin, fixed expenses are deducted from contribution margin to get net income or loss.

Requirement 5-:

To prepare:

Forecasted contribution margin income statement.

Answer 36

Expert Solution

Answer to Problem 4BPSB

Rivera Company
Forecasted contribution margin income statement

Particulars	Amount ($)
Sales	916,688
Variable costs	(366,675)
Contribution margin	550,013
Fixed costs	(350,000)
Net income	200,013

Answer 37

Expert Solution

Answer 38

Expert Solution

Answer 39

Expert Solution

Answer 40

Explanation of Solution

Sales price per unit = $750,000/20,000 unitsSales price per unit =$37.5Sales at breakeven = 24,445 units * $37.5Sales at breakeven = $916,688

Variable costs per unit = $300,000 / 20,000 unitsVariable costs per unit = $15Variable costs at breakeven = 24,445 * $15Variable costs at breakeven = $366,675