HORNGRENS COST ACCOUNTING W/ACCESS
16th Edition
ISBN: 9781323687604
Author: Datar
Publisher: PEARSON
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Textbook Question
Chapter 3, Problem 3.27E
CVP analysis, income taxes. The Home Style Eats has two restaurants that are open 24 hours a day. Fixed costs for the two restaurants together total $430,500 per year. Service varies from a cup of coffee to full meals. The average sales check per customer is $8.75. The average cost of food and other variable costs for each customer is $3.50. The income tax rate is 36%. Target net income is $117,600.
- 1. Compute the revenues needed to earn the target net income.
Required
- 2. How many customers are needed to break even? To earn net income of $117,600?
- 3. Compute net income if the number of customers is 170,000.
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CVP analysis, income taxes. The Home Style Eats has two restaurants that are open 24 hours a
day. Fixed costs for the two restaurants together total $430,500 per year. Service varies from a cup of coffee
to full meals. The average sales check per customer is $8.75. The average cost of food and other variable
Costs for each customer is $3.50. The income tax rate is 36%, Target net income is $117,600.
Jau
Compute the revenues needed to earn the target net income.
How many customers are needed to break even? To earn net income of $117,600?
Compute net income if the number of customers is 170,000.
1.
2.
162
3.
CVP analysis, income taxes. The Express Banquet has two restaurants that are open 24-hours aday. Fixed costs for the two restaurants together total $459,000 per year. Service varies from a cup of coffeeto full meals. The average sales check per customer is $8.50. The average cost of food and other variablecosts for each customer is $3.40. The income tax rate is 30%. Target net income is $107,100.Required 1. Compute the revenues needed to earn the target net income.2. How many customers are needed to break even? To earn net income of $107,100?3. Compute net income if the number of customers is 170,000.
The Home Style Eats has two restaurants that are open 24 hours a day. Fixed costs for the two restaurants together total $430,500 per year. Service varies from a cup of coffee to full meals. The average sales check per customer is $8.75. The average cost of food and other variable costs for each customer is $3.50. The income tax rate is 36%. Target net income is $117,600.
Q1. Compute the revenues needed to earn the target net income.
Q2. How many customers are needed to break even? To earn net income of $117,600?
Q3. Compute net income if the number of customers is 170,000.
Chapter 3 Solutions
HORNGRENS COST ACCOUNTING W/ACCESS
Ch. 3 - Define costvolumeprofit analysis.Ch. 3 - Describe the assumptions underlying CVP analysis.Ch. 3 - Distinguish between operating income and net...Ch. 3 - Prob. 3.4QCh. 3 - Prob. 3.5QCh. 3 - Why is it more accurate to describe the subject...Ch. 3 - CVP analysis is both simple and simplistic. If you...Ch. 3 - Prob. 3.8QCh. 3 - Prob. 3.9QCh. 3 - Give an example of how a manager can decrease...
Ch. 3 - Give an example of how a manager can increase...Ch. 3 - What is operating leverage? How is knowing the...Ch. 3 - There is no such thing as a fixed cost. All costs...Ch. 3 - Prob. 3.14QCh. 3 - In CVP analysis, gross margin is a less-useful...Ch. 3 - Jacks Jax has total fixed costs of 25,000. If the...Ch. 3 - During the current year, XYZ Company increased its...Ch. 3 - Under the contribution income statement, a...Ch. 3 - A company needs to sell 10,000 units of its only...Ch. 3 - Once a company exceeds its breakeven level,...Ch. 3 - Prob. 3.21ECh. 3 - CVP computations. Garrett Manufacturing sold...Ch. 3 - CVP analysis, changing revenues and costs. Sunset...Ch. 3 - CVP exercises. The Deli-Sub Shop owns and operates...Ch. 3 - CVP exercises. The Doral Company manufactures and...Ch. 3 - CVP analysis, income taxes. Westover Motors is a...Ch. 3 - CVP analysis, income taxes. The Home Style Eats...Ch. 3 - CVP analysis, sensitivity analysis. Perfect Fit...Ch. 3 - CVP analysis, margin of safety. Suppose Morrison...Ch. 3 - Operating leverage. Cover Rugs is holding a 2-week...Ch. 3 - CVP analysis, international cost structure...Ch. 3 - Sales mix, new and upgrade customers. Chartz 1-2-3...Ch. 3 - Prob. 3.33ECh. 3 - Prob. 3.34ECh. 3 - Contribution margin, decision making. Welch Mens...Ch. 3 - Contribution margin, gross margin, and margin of...Ch. 3 - Uncertainty and expected costs. Kindmart is an...Ch. 3 - CVP analysis, service firm. Lifetime Escapes...Ch. 3 - CVP, target operating income, service firm....Ch. 3 - CVP analysis, margin of safety. Marketing Docs...Ch. 3 - CVP analysis, income taxes. (CMA, adapted) J.T....Ch. 3 - CVP, sensitivity analysis. The Derby Shoe Company...Ch. 3 - CVP analysis, shoe stores. The HighStep Shoe...Ch. 3 - CVP analysis, shoe stores (continuation of 3-43)....Ch. 3 - Prob. 3.45PCh. 3 - Prob. 3.46PCh. 3 - CVP analysis, income taxes, sensitivity. (CMA,...Ch. 3 - Choosing between compensation plans, operating...Ch. 3 - Prob. 3.49PCh. 3 - Multiproduct CVP and decision making. Crystal...Ch. 3 - Sales mix, two products. The Stackpole Company...Ch. 3 - Prob. 3.52PCh. 3 - Ethics, CVP analysis. Megaphone Corporation...Ch. 3 - Deciding where to produce. (CMA, adapted) Portal...
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