1.
Concept introduction:
Net operating income: Net operating income also called NOI, is the revenue from the property, after deducting all the necessary operating expenses. It is basically a calculation which is used to identify the profitability of income generating from investments. The net operating income does not include capital expenditure.
Break-even point: Break-even point is the point at which the costs incurred equals to the revenue earned. That means there is no profit or loss.
Net operating income or loss for the year.
2.
Concept introduction:
Net operating income: Net operating income also called NOI, is the revenue from the property, after deducting all the necessary operating expenses. It is basically a calculation which is used to identify the profitability of income generating from investments. The net operating income does not include capital expenditure.
Break-even point: Break-even point is the point at which the costs incurred equals to the revenue earned. That means there is no profit or loss.
The product’s break-even points in unit sales and dollar sales.
3.
Concept introduction:
Net operating income: Net operating income also called NOI, is the revenue from the property, after deducting all the necessary operating expenses. It is basically a calculation which is used to identify the profitability of income generating from investments. The net operating income does not include capital expenditure.
Break-even point: Break-even point is the point at which the costs incurred equals to the revenue earned. That means there is no profit or loss.
Maximum annual profit that can earn on the product and what sales volume and selling price per unit generate maximum profit.
4.
Concept introduction:
Net operating income: Net operating income also called NOI, is the revenue from the property, after deducting all the necessary operating expenses. It is basically a calculation which is used to identify the profitability of income generating from investments. The net operating income does not include capital expenditure.
Break-even point: Break-even point is the point at which the costs incurred equals to the revenue earned. That means there is no profit or loss.
Break-even point in units and dollar using selling price determined in requirement 3 and the reason for difference between these two break-even points.
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Chapter 5 Solutions
MANAGERIAL ACCOUNTING-W/ACCESS >C<
- Sh9 Please help me. Solution Thankyou.arrow_forwardThe following are the unadjusted ledger balances of La Vie Limited for the year ended 31 December 2023: Ordinary Share Capital Sales Trade payables Returns Outwards Purchases Returns Inwards Carriage outwards Carriage inwards Rental expense Insurance expense Sales and Marketing Office salaries expense Cash at Bank Opening Inventory at 1st January 2023 Trade Receivables Plant and Machinery at cost Accumulated Depreciation (1st January 2023: Plant and Machinery) Motor Vehicles at cost Rental expense owing as at 31 December 2023 Depreciation for the year - Plant and Equipment Depreciation for the year - Motor Vehicles Income Statements for the year ended 31 December 2023 La Vie Limited Mikie Limited Sales Cost of goods sold Additional information needed for year-end adjustments, are as follows: Insurance for January 2024 $800 Closing Inventory, at 31 December 2023 $3,500 Irrecoverable debts to be written off $350 $11,000 10% using straight line method 18% on cost Gross profit Less:…arrow_forwardPROBLEM 2. Outlast Company's projected profit for the coming year follows: Per Unit Total P200,000 (120,000) 80,000 (64,000) P 16,000 Sales P20 Less: Variable costs (12) Contribution margin Less Fixed expenses P 8 Income Requirements: 1. Compute the breakeven point in units. 2. How many units must be sold to earn a profit of P30,000? 3. Compute the additional profit that Outlast would eari sales were P25,000 more than expected.arrow_forward
- QUESTION 8 Toy Story, Inc., has the capacity to produce 100,000 toys per year but only produces 80,000 toys per year. The sale price is $10, the variable cost is $7 and allocated overhead equals $80,000 per year. Company B offers to buy an additional 18,000 toys but is only willing to pay $5 per toy. What is the additional operating income (loss) of accepting the offer? ENTER NEGATIVE NUMBERS WITH A "-" SIGN. DO NOT USE PARENTHESES. EXAMPLE: -10,000arrow_forwardPparrow_forwardbreak-even in each of the following situations described below: Exercise 4-10 Compute the number of units or product that must be soid if the company is to | The fixed cost is P312,000 a year. Each unit sold contributes P6 to the recovery of fixed cost and to profit. 2 The variable cost is equal to 70% of sales revenue. Each unit of product is sold for P20. The fixed costs amount to P420,000 per year. 3. Contribution margin is equal to 28% of the revenue. Each unit of product sells for P50. The fixed cost is P210,000 for the year. 4. A variable cost of P9 per unit of product is equal to 60% of the selling price. The fixed cost for the year amount to P390,000. 5. Each unit of product sold contributes 30% of its revenues to the recovery of fixed cost and to profit. The fixed cost amount to P420,000 for the year, and each product is sold at a price of P10. Exercise 4-11 By using the high-low method, Maricel Hotel Company estimates the total costs of providing room service. meals to amount…arrow_forward
- PROBLEM 3: The company expected to sell 45,000 units next year with the following results: Sales P900,000 Variable costs 540,000 360,000 150,000 210,000 84,000 P126,000 Contribution margin Fixed costs Income before taxes Income taxes Net income a. If the company wants an after-tax return on sales of 15% on its expected volume of 45,000 units, what price must it charge? a. 19.66 b. 20.44 c. 20.22 d. 22.22arrow_forwardProvide right answerarrow_forwardPROBLEM 2. Outlast Company's projected profit for the coming year follows: Per Unit Total P200,000 (120,000) 80,000 (64,000) P 16,000 Sales Less: Variable costs P20 (12) P 8 Contribution margin Less Fixed expenses Income 4. Suppose Outlast would like to earn operating income equ to 20 percent of sales revenue. How many units must be sold for this goal to be realized? 5. For the projected level of sales, compute the margin of safety.arrow_forward
- Plz answer correctly asaparrow_forwardPAGE 1.1 NUBD Co. plans to market a new product. Based on its market studies. It estimates that it can sell 70,000 units in 2021. The selling price per unit is P2.00. Variable cost ratio is 40% of sales. Fixed costs are estimated to be P60,000. A.Compute the break-even point in units. B.Compute the break-even point in sales pesos.arrow_forwardProblem 1 The M/S Smooth flow Company manufactures a certain fountain pen. The fixed costs of the company are RO.300,000 per year. The unit selling price (net) is RO.8 and the unit variable cost is RO.5. At present the firm manufactures and sells 140,000 fountain pens. Determine: (i) Break Even Quantity (ii) Break Even Sales (iii) Margin of Safety In terms of units In terms of value (iv)Plot the Break Even Chartarrow_forward
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning