Managerial Accounting: Creating Value in a Dynamic Business Environment
11th Edition
ISBN: 9781259569562
Author: Ronald W Hilton Proffesor Prof, David Platt
Publisher: McGraw-Hill Education
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Question
Chapter 7, Problem 24E
1.
To determine
Calculate the company’s break-even point in units using the contribution-margin approach.
2.
To determine
Calculate the contribution-margin ratio.
3.
To determine
Calculate the break-even sales revenue using the contribution margin ratio.
4.
To determine
Calculate the number of pizzas the company must sell to earn a target profit of $65,000 using the equation method.
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2 Smart pizza delivers pizzas to the dormitories and apartments near a major university. The company's
annual fixed expenses are 40,000. The sales price of a pizza is $10. and it costs the company$6 to
make and deliver each pizza.
Required:
1) Using the CM approach, compute the company's break-even point in units(pizza)
2) What is the contribution-margin ratio
3) Compute the break-even sales revenue. Use the contribution-margin ratio in your calculation
4) How many pizzas must the company sell to eam a target operating income of 80,000?
Required:
1. Complete the following table.
2. Suppose Sandy Bank sells its canoes for $590 each. Calculate the contribution margin per canoe and the contribution margin ratio.
3. This year Sandy Bank expects to sell 760 canoes for $590 each. Prepare a contribution margin income statement for the company.
4. Calculate Sandy Bank's break-even point in units and in sales dollars. Sandy Bank sells its canoes for $590 each.
5. Suppose Sandy Bank wants to earn $76,000 profit this year. Calculate the number of canoes that must be sold to achieve this
target. Sandy Bank sells its canoes for $590 each.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Complete the following table.
Note: Round your "Cost per Unit" answers to 2 decimal places.
Number of Canoes Produced and Sold
Total costs
Variable Costs
Fixed Costs
Total Costs
Cost per Unit
Required 3 Required 4
Variable Cost per Unit
Fixed Cost per Unit
Total Cost per Unit
$
$
$
500
Required 5
780
0
0.00
Chapter 7 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 7 - Prob. 1RQCh. 7 - What is the meaning of the term unit contribution...Ch. 7 - What information is conveyed by a...Ch. 7 - What does the term safety margin mean?Ch. 7 - Prob. 5RQCh. 7 - Delmarva Oyster Company has been able to decrease...Ch. 7 - In a strategy meeting, a manufacturing companys...Ch. 7 - What will happen to a companys break-even point if...Ch. 7 - Prob. 9RQCh. 7 - How can a profit-volume graph be used to predict a...
Ch. 7 - List the most important assumptions of...Ch. 7 - Why do many operating managers prefer a...Ch. 7 - Prob. 13RQCh. 7 - East Company manufactures VCRs using a completely...Ch. 7 - When sales volume increases, which company will...Ch. 7 - What does the term sales mix mean? How is a...Ch. 7 - A car rental agency rents subcompact, compact, and...Ch. 7 - How can a hotels management use cost-volume-profit...Ch. 7 - How could cost-volume-profit analysis be used in...Ch. 7 - Prob. 20RQCh. 7 - Prob. 21RQCh. 7 - Explain briefly how activity-based costing (ABC)...Ch. 7 - Fill in the missing data for each of the following...Ch. 7 - Prob. 24ECh. 7 - Rosario Company, which is located in Buenos Aires,...Ch. 7 - The Houston Armadillos, a minor-league baseball...Ch. 7 - Prob. 27ECh. 7 - Europa Publications, Inc. specializes in reference...Ch. 7 - Tims Bicycle Shop sells 21-speed bicycles. For...Ch. 7 - A contribution income statement for the Nantucket...Ch. 7 - Refer to the income statement given in the...Ch. 7 - Hydro Systems Engineering Associates, Inc....Ch. 7 - Disk City, Inc. is a retailer for digital video...Ch. 7 - CollegePak Company produced and sold 60,000...Ch. 7 - Prob. 36PCh. 7 - Prob. 37PCh. 7 - Prob. 38PCh. 7 - Consolidated Industries is studying the addition...Ch. 7 - Serendipity Sound, Inc. manufactures and sells...Ch. 7 - Prob. 41PCh. 7 - The European Division of Worldwide Reference...Ch. 7 - Prob. 43PCh. 7 - Celestial Products, Inc. has decided to introduce...Ch. 7 - Prob. 45PCh. 7 - Jupiter Game Company manufactures pocket...Ch. 7 - Prob. 47PCh. 7 - Condensed monthly income data for Thurber Book...Ch. 7 - Cincinnati Tool Company (CTC) manufactures a line...Ch. 7 - Ohio Limestone Company produces thin limestone...Ch. 7 - Prob. 51PCh. 7 - Colorado Telecom, Inc. manufactures...Ch. 7 - Prob. 53CCh. 7 - Prob. 54CCh. 7 - Niagra Falls Sporting Goods Company, a wholesale...
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