a1 17. A company manufactures a single product. Cost and selling price data for the product are asfollows:Budgeted sales200 unitsSelling price$260.00 per unitVariable cost$240.00 per unitFixed costs$18 000 per monthWhat is the margin of safety, expressed as a percentage of budgeted sales (per month)?A[] 20%B[25%C[]75%]80%

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Answered: 17. A company manufactures a single…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 7MC: Company A wants to earn $5,000 profit in the month of January. If their fixed costs are $10,000 and...

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Variable Cost Ratio, Contribution Margin Ratio Chillmax Company plans to sell 3,500 pairs of shoes at 60 each in the coming year. Unit variable cost is 21 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Fixed factory overhead is 30,000 and fixed selling and administrative expense is 48,000. Required: 1. Calculate the variable cost ratio. 2. Calculate the contribution margin ratio. 3. Prepare a contribution margin income statement based on the budgeted figures for next year. In a column next to the income statement, show the percentages based on sales for sales, total variable cost, and total contribution margin.
Company A wants to earn $5,000 profit in the month of January. If their fixed costs are $10,000 and their product has a per-unit contribution margin of $250, how many units must they sell to reach their target income? A.20 B. 40 C. 60 D. 120
Caribbean Hammocks currently sells 75.000 units at $50 per unit. Its expenses are: Management believes it can increase sales by 5,000 units for every $5 decrease in sales price. It also believes the additional sales will allow a decrease in direct material of $1 for each additional 5,000 units. Prepare a flexible budgeted income statement for 75,000-, 80,000-, and 85,000-unit sales.
Suppose that a company is spending 60,000 per year for inspecting, 30,000 for purchasing, and 40,000 for reworking products. A good estimate of nonvalue-added costs would be a. 70,000. b. 130,000. c. 40,000. d. 90,000. e. 100,000.
Sales Revenue Approach, Variable Cost Ratio, Contribution Margin Ratio Arberg Companys controller prepared the following budgeted income statement for the coming year: Required: 1. What is Arbergs variable cost ratio? What is its contribution margin ratio? 2. Suppose Arbergs actual revenues are 30,000 more than budgeted. By how much will operating income increase? Give the answer without preparing a new income statement 3. How much sales revenue must Arberg earn to break even? Prepare a contribution margin income statement to verify the accuracy of your answer. 4. What is Arbergs expected margin of safety? 5. What is Arbergs margin of safety if sales revenue is 380,000?
Jasmine Companys expected sales were 2,000 units at 100 per unit. During 20x1, it had actual sales of 1,800 units at 110 per unit. Budgeted variable costs were 60 per unit. What is Jasmines sales price variance? a. 8,000 (U) b. 20,000 (U) c. 18,000 (F) d. 2,000 (U)
SOM plc sells one product for which data for a budgeted period are given below: Selling price per unit Variable cost per unit Fixed cost per unit £ 90 40 22 Fixed costs are based on a budgeted level of activity of 5,000 units. Calculate the total costs of production of 5,000 units: A. £110,000 B. £250,000 C. £450,000 D. £310,000.
17. A company manufactures a single product. Cost and selling price data for the product are as follows: Budgeted sales Selling price Variable cost 200 units $ 260.00 per unit $ 240.00 per unit Fixed costs $18 000 per month What is the margin of safety, expressed as a percentage of budgeted sales (per month)? [ ] 20% ABCD ] 25% [ ] 75% 80%
A company manufactures a single product. Below are the budgeted costs for the next financial period: Selling price per unit R24 Variable production cost per unit R8.60 Fixed production costs R650 000 Fixed selling and distribution costs R230 400 Sales commission 5% of selling price Sales 90 000 units The margin of safety is: a. None of the above b. 37.7% c. 30.0% d. 37.4% e. 31.1%
QUESTION2 A company manufactures a single product. Budget and Standard cost details for next year include: Selling Price per unit R24.00 Variable Production cost per unit R8.60 Fixed production costs R650 000 Fixed selling and distrivution costs R230 400 Sales commission 5% of selling price Sales 90 000 units Required 1. Calculate the break-even point in units 2. Calculate the breakeven point in rands 3. Calculate the percentage by which the budgeted sales can fall before The company begins to make a loss 4. The marketing manager has suggested that the selling price per unit can be increased to R25.00.If the sales…
6. Bloomsbury plc sells one product for which data for a budgeted period are given below: Selling price per unit Variable cost per unit Fixed cost per unit 80 48 16 Fixed costs are based on a budgeted level of activity of 5,000 units. Calculate the total costs of production of 5,000 units: A. £80,000 B. £240,000 C. £320,000 D. £400,000.
Abel Company manufactures a single product. Budgeted data are as follows: Production /sales 12,000 units Variable costs per unit P 7.20 Fixed costs P 9,600 Current assets 60% of sales Fixed assets P 48,000 The company wants to earn 20% return on investment (Assets), What should be the selling price per unit?a. 8.00b. 10.00c. 12.00d. 12.50

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