Contribution margin: Contribution margin is the difference between sales price and variable costs. It is calculated with the help of following formula : C o n t r i b u t i o n M a r g i n = S a l e s p r i c e – V a r i a b l e c o s t s Breakeven point: The Breakeven point is level of sales at which the net profit is zero. In other words, the breakeven point is the amount of sales at which there no loss and no profit. The formulas to calculate breakeven point are as follows: B r e a k e v e n p o i n t ( U n i t s ) = T o t a l 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 p e r u n i t B r e a k e v e n p o i n t ( D o l l a r ) = T o t a l 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 calculate: The breakeven units using the equation approach

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Question

Chapter 21, Problem P21.58BPGB

To determine

Concept Introduction:

Contribution margin: Contribution margin is the difference between sales price and variable costs. It is calculated with the help of following formula:

$C o n t r i b u t i o n M a r g i n = S a l e s p r i c e - V a r i a b l e c o s t s$

Breakeven point: The Breakeven point is level of sales at which the net profit is zero. In other words, the breakeven point is the amount of sales at which there no loss and no profit. The formulas to calculate breakeven point are as follows:

$B r e a k e v e n p o i n t (U n i t s) = \frac{T o t a l F i x e d c o s t s}{C o n t r i b u t i o n m a r g i n p e r u n i t}$

$B r e a k e v e n p o i n t (D o l l a r) = \frac{T o t a l F i x e d c o s t s}{C o n t r i b u t i o n m a r g i n r a t i o}$

Requirement-1:

To calculate: The breakeven units using the equation approach

To determine

Requirement-2:

To calculate: The Dollar sales to earn the desired income using the contribution margin approach

To determine

Requirement-3:

To Prepare: The Contribution Margin Income Statement for the year 2016

To determine

Requirement-4:

To calculate: The breakeven units and breakeven sales $ under the explanation plan and take decision for the expansion

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For each of the transactions above, indicate the amount of the adjusting entry on the elements of the balance sheet and income statement.Note: Enter negative amounts with a minus sign.

Answer 2

Question

Chapter 21, Problem P21.58BPGB

To determine

Concept Introduction:

Contribution margin: Contribution margin is the difference between sales price and variable costs. It is calculated with the help of following formula:

$C o n t r i b u t i o n M a r g i n = S a l e s p r i c e - V a r i a b l e c o s t s$

Breakeven point: The Breakeven point is level of sales at which the net profit is zero. In other words, the breakeven point is the amount of sales at which there no loss and no profit. The formulas to calculate breakeven point are as follows:

$B r e a k e v e n p o i n t (U n i t s) = \frac{T o t a l F i x e d c o s t s}{C o n t r i b u t i o n m a r g i n p e r u n i t}$

$B r e a k e v e n p o i n t (D o l l a r) = \frac{T o t a l F i x e d c o s t s}{C o n t r i b u t i o n m a r g i n r a t i o}$

Requirement-1:

To calculate: The breakeven units using the equation approach

To determine

Requirement-2:

To calculate: The Dollar sales to earn the desired income using the contribution margin approach

To determine

Requirement-3:

To Prepare: The Contribution Margin Income Statement for the year 2016

To determine

Requirement-4:

To calculate: The breakeven units and breakeven sales $ under the explanation plan and take decision for the expansion

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Answer 3

Question

Chapter 21, Problem P21.58BPGB

To determine

Concept Introduction:

Contribution margin: Contribution margin is the difference between sales price and variable costs. It is calculated with the help of following formula:

$C o n t r i b u t i o n M a r g i n = S a l e s p r i c e - V a r i a b l e c o s t s$

Breakeven point: The Breakeven point is level of sales at which the net profit is zero. In other words, the breakeven point is the amount of sales at which there no loss and no profit. The formulas to calculate breakeven point are as follows:

$B r e a k e v e n p o i n t (U n i t s) = \frac{T o t a l F i x e d c o s t s}{C o n t r i b u t i o n m a r g i n p e r u n i t}$

$B r e a k e v e n p o i n t (D o l l a r) = \frac{T o t a l F i x e d c o s t s}{C o n t r i b u t i o n m a r g i n r a t i o}$

Requirement-1:

To calculate: The breakeven units using the equation approach

To determine

Requirement-2:

To calculate: The Dollar sales to earn the desired income using the contribution margin approach

To determine

Requirement-3:

To Prepare: The Contribution Margin Income Statement for the year 2016

To determine

Requirement-4:

To calculate: The breakeven units and breakeven sales $ under the explanation plan and take decision for the expansion

Expert Solution & Answer

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Answer 4

Question

Chapter 21, Problem P21.58BPGB

To determine

Concept Introduction:

Contribution margin: Contribution margin is the difference between sales price and variable costs. It is calculated with the help of following formula:

$C o n t r i b u t i o n M a r g i n = S a l e s p r i c e - V a r i a b l e c o s t s$

Breakeven point: The Breakeven point is level of sales at which the net profit is zero. In other words, the breakeven point is the amount of sales at which there no loss and no profit. The formulas to calculate breakeven point are as follows:

$B r e a k e v e n p o i n t (U n i t s) = \frac{T o t a l F i x e d c o s t s}{C o n t r i b u t i o n m a r g i n p e r u n i t}$

$B r e a k e v e n p o i n t (D o l l a r) = \frac{T o t a l F i x e d c o s t s}{C o n t r i b u t i o n m a r g i n r a t i o}$

Requirement-1:

To calculate: The breakeven units using the equation approach

To determine

Requirement-2:

To calculate: The Dollar sales to earn the desired income using the contribution margin approach

To determine

Requirement-3:

To Prepare: The Contribution Margin Income Statement for the year 2016

To determine

Requirement-4:

To calculate: The breakeven units and breakeven sales $ under the explanation plan and take decision for the expansion

Expert Solution & Answer

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Answer 5

Chapter 21, Problem P21.58BPGB

To determine

Concept Introduction:

Contribution margin: Contribution margin is the difference between sales price and variable costs. It is calculated with the help of following formula:

$C o n t r i b u t i o n M a r g i n = S a l e s p r i c e - V a r i a b l e c o s t s$

Breakeven point: The Breakeven point is level of sales at which the net profit is zero. In other words, the breakeven point is the amount of sales at which there no loss and no profit. The formulas to calculate breakeven point are as follows:

$B r e a k e v e n p o i n t (U n i t s) = \frac{T o t a l F i x e d c o s t s}{C o n t r i b u t i o n m a r g i n p e r u n i t}$

$B r e a k e v e n p o i n t (D o l l a r) = \frac{T o t a l F i x e d c o s t s}{C o n t r i b u t i o n m a r g i n r a t i o}$

Requirement-1:

To calculate: The breakeven units using the equation approach

To determine

Requirement-2:

To calculate: The Dollar sales to earn the desired income using the contribution margin approach

To determine

Requirement-3:

To Prepare: The Contribution Margin Income Statement for the year 2016

To determine

Requirement-4:

To calculate: The breakeven units and breakeven sales $ under the explanation plan and take decision for the expansion

Answer 6

Chapter 21, Problem P21.58BPGB

To determine

Concept Introduction:

Contribution margin: Contribution margin is the difference between sales price and variable costs. It is calculated with the help of following formula:

$C o n t r i b u t i o n M a r g i n = S a l e s p r i c e - V a r i a b l e c o s t s$

Breakeven point: The Breakeven point is level of sales at which the net profit is zero. In other words, the breakeven point is the amount of sales at which there no loss and no profit. The formulas to calculate breakeven point are as follows:

$B r e a k e v e n p o i n t (U n i t s) = \frac{T o t a l F i x e d c o s t s}{C o n t r i b u t i o n m a r g i n p e r u n i t}$

$B r e a k e v e n p o i n t (D o l l a r) = \frac{T o t a l F i x e d c o s t s}{C o n t r i b u t i o n m a r g i n r a t i o}$

Requirement-1:

To calculate: The breakeven units using the equation approach

Answer 7

Chapter 21, Problem P21.58BPGB

To determine

Concept Introduction:

Contribution margin: Contribution margin is the difference between sales price and variable costs. It is calculated with the help of following formula:

$C o n t r i b u t i o n M a r g i n = S a l e s p r i c e - V a r i a b l e c o s t s$

Breakeven point: The Breakeven point is level of sales at which the net profit is zero. In other words, the breakeven point is the amount of sales at which there no loss and no profit. The formulas to calculate breakeven point are as follows:

$B r e a k e v e n p o i n t (U n i t s) = \frac{T o t a l F i x e d c o s t s}{C o n t r i b u t i o n m a r g i n p e r u n i t}$

$B r e a k e v e n p o i n t (D o l l a r) = \frac{T o t a l F i x e d c o s t s}{C o n t r i b u t i o n m a r g i n r a t i o}$

Requirement-1:

To calculate: The breakeven units using the equation approach

Answer 8

To determine

Requirement-2:

To calculate: The Dollar sales to earn the desired income using the contribution margin approach

Answer 9

To determine

Requirement-2:

To calculate: The Dollar sales to earn the desired income using the contribution margin approach

Answer 10

To determine

Requirement-3:

To Prepare: The Contribution Margin Income Statement for the year 2016

Answer 11

To determine

Requirement-3:

To Prepare: The Contribution Margin Income Statement for the year 2016

Answer 12

To determine

Requirement-4:

To calculate: The breakeven units and breakeven sales $ under the explanation plan and take decision for the expansion

Answer 13

To determine

Requirement-4:

To calculate: The breakeven units and breakeven sales $ under the explanation plan and take decision for the expansion

Answer 14

Expert Solution & Answer

Answer 15

Expert Solution & Answer

Answer 16

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Answer 17

Ch. 21 - For Frank’s Funky Sounds, straight-line...Ch. 21 - Prob. 2QC Ch. 21 - Prob. 3QC Ch. 21 - Prob. 4QC Ch. 21 - Prob. 5QC Ch. 21 - On a CVP graph, the total cost line intersects the...Ch. 21 - If a company increases its sales price per unit...Ch. 21 - Prob. 8QC Ch. 21 - Prob. 9QC Ch. 21 - Prob. 10QC

Requirement-2: To calculate: The Dollar sales to earn the desired income using the contribution margin approach

Requirement-3: To Prepare: The Contribution Margin Income Statement for the year 2016

Requirement-4: To calculate: The breakeven units and breakeven sales $ under the explanation plan and take decision for the expansion

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Chapter 21 Solutions

Requirement-2:

To calculate: The Dollar sales to earn the desired income using the contribution margin approach

Requirement-3:

To Prepare: The Contribution Margin Income Statement for the year 2016

Requirement-4:

To calculate: The breakeven units and breakeven sales $ under the explanation plan and take decision for the expansion