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The Central Valley Company is a manufacturing firm that produces and sells a single product. The company's revenues and expenses for the last four months are given below. Sales in units Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses Shipping expense Advertising expense Salaries and commissions Insurance expense Amortization expense Total operating expenses Net income Central Valley Company Comparative Income Statement Cost of goods sold Shipping Salanes & commission April 5,800 6,300 $ 762,300 $ 701,800 $871,200 405,450 378,972 $ 356,850 $322,828 $ March May 7,200 453,024 $ 418,176 per unit por unit per unit $ 67,600 89,500 168,000 $ 53,400 64,100 89,500 89,500 136,500 164,700 15,500 15,500 48,500 48,500 $ 382,300 $ 343,400 $389,100 $385,000 $ (25,450) $ (20,572) $ 29,076 $ 124,894 15,500 48,500 June 8,600 $1,040,600 530,706 $509,894 $ 64,500 89,500 167,000 Required: 1. Management is concerned about the losses experienced during the spring and would like to know more about the cost behaviour, Develop a cost equation for each of the costs. (Do not round intermediate calculations. Round "Per Unit" answers to 2 decimal places.) 15,500 48,500

The Central Valley Company is a manufacturing firm that produces and sells a single product. The company's revenues and expenses for the last four months are given below. Sales in units Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses Shipping expense Advertising expense Salaries and commissions Insurance expense Amortization expense Total operating expenses Net income Central Valley Company Comparative Income Statement Cost of goods sold Shipping Salanes & commission April 5,800 6,300 $ 762,300 $ 701,800 $871,200 405,450 378,972 $ 356,850 $322,828 $ March May 7,200 453,024 $ 418,176 per unit por unit per unit $ 67,600 89,500 168,000 $ 53,400 64,100 89,500 89,500 136,500 164,700 15,500 15,500 48,500 48,500 $ 382,300 $ 343,400 $389,100 $385,000 $ (25,450) $ (20,572) $ 29,076 $ 124,894 15,500 48,500 June 8,600 $1,040,600 530,706 $509,894 $ 64,500 89,500 167,000 Required: 1. Management is concerned about the losses experienced during the spring and would like to know more about the cost behaviour, Develop a cost equation for each of the costs. (Do not round intermediate calculations. Round "Per Unit" answers to 2 decimal places.) 15,500 48,500

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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2. Assume that fixed costs are incurred uniformly throughout the year. Compute the annual break-even sales, and the profit if 80,500 units are sold during the year. (Round "Break-even sales" answer to nearest whole number.) Break-even sales Annual profit (80,500 units) units 3. Calculate the change in profit if the selling price were reduced by $11.00 each and annual sales were to increase by 7,600 units. 4. Determine the change in profit if the company were to increase advertising by $113,000 and if this were to increase sales by 7,600 units.
Transcribed Image Text:2. Assume that fixed costs are incurred uniformly throughout the year. Compute the annual break-even sales, and the profit if 80,500 units are sold during the year. (Round "Break-even sales" answer to nearest whole number.) Break-even sales Annual profit (80,500 units) units 3. Calculate the change in profit if the selling price were reduced by $11.00 each and annual sales were to increase by 7,600 units. 4. Determine the change in profit if the company were to increase advertising by $113,000 and if this were to increase sales by 7,600 units.
The Central Valley Company is a manufacturing firm that produces and sells a single product. The company's revenues and expenses for the last four months are given below. Sales in units Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses. Shipping expense Advertising expense Salaries and commissions Insurance expense Amortization expense Total operating expenses Net income Central Valley Company Comparative Income Statement Cost of goods sold Shipping Salanes & commission March ... April 6,300 5,800 $ 762,300 $ 701,800 405,450 378,972 $ 356,850 $ 322,828 $ $ 53,400 89,500 $ 67,600 89,500 168,000 64,100 89,500 164,700 15,500 48,500 48,500 48,500 $ 382,300 $343,400 $ 389,100 $ (25,450) $ (20,572) $ 29,076 136,500 15,500 15,500 May 7,200 $ 871,200 453,024 $418,176 per unit por unit por unit June 8,600 $1,040,600 530,706 $509,894 $ 64,500 89,500 167,000 Required: 1. Management is concerned about the losses experienced during the spring and would like to know more about the cost behaviour. Develop a cost equation for each of the costs. (Do not round intermediate calculations. Round "Per Unit" answers to 2 decimal places.) 15,500 48,500 $385,000 $ 124,894
Transcribed Image Text:The Central Valley Company is a manufacturing firm that produces and sells a single product. The company's revenues and expenses for the last four months are given below. Sales in units Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses. Shipping expense Advertising expense Salaries and commissions Insurance expense Amortization expense Total operating expenses Net income Central Valley Company Comparative Income Statement Cost of goods sold Shipping Salanes & commission March ... April 6,300 5,800 $ 762,300 $ 701,800 405,450 378,972 $ 356,850 $ 322,828 $ $ 53,400 89,500 $ 67,600 89,500 168,000 64,100 89,500 164,700 15,500 48,500 48,500 48,500 $ 382,300 $343,400 $ 389,100 $ (25,450) $ (20,572) $ 29,076 136,500 15,500 15,500 May 7,200 $ 871,200 453,024 $418,176 per unit por unit por unit June 8,600 $1,040,600 530,706 $509,894 $ 64,500 89,500 167,000 Required: 1. Management is concerned about the losses experienced during the spring and would like to know more about the cost behaviour. Develop a cost equation for each of the costs. (Do not round intermediate calculations. Round "Per Unit" answers to 2 decimal places.) 15,500 48,500 $385,000 $ 124,894
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