
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Question

Transcribed Image Text:ats of the same question are to be answered consecutively.
. If anv similarity is found with your friends, both of you will get zero. Don't share your answ
scrip
V. A
prepared and submitted in Excel Sheet. Use formula where needed.
1. XYZ Company distributes a single product. The company's sales and expenses for last month
10
follow:
Total
Per Unit
Sales
Tk 5,00,000
Tk 50
Variable expenses
Contribution margin
Fixed expenses
Net operating income
2,00,000
20
3,00,000
Tk 30
2,30,000
Tk 70,000
Requirements:
A) What is the monthly break-even point in unit sales and in Taka sales?
B) Without resorting to computations, what is the total contribution margin at the break-even point?
C) How many units would have to be sold each month to earn a target profit of Tk 1,00,000? Verify
your answer by preparing a contribution format income statement at the target sales level.
D) Refer to the original data. Compute the margin of safety in both Taka and percentage terms.
E) What is the company's CM ratio? If sales increase by Tk 50,000 per month and there is no change
in fixed expenses, by how much would you expect monthly net operating income to increase?
2. You have been asked to prepare a December cash budget for Ahnaf Company, a distributor of 10
exercise equipment. The following information is available about the company’s operations:
a. The cash balance on December 1 is Tk 45,000.
b. Actual sales for October and November and expected sales for December are as follows:
October
November
December
Cash sales . ...
Tk 60,000
Tk 75,000
Tk 80,000
Tk 450,000
Tk 520,000
Tk 600,000
Sales on account
Sales on account are collected over a three-month period as follows: 20% collected in the month of
sale, 60% collected in the month following sale, and 18% collected in the second month following
sale. The remaining 2% is uncollectible.
c. Purchases of inventory will total Tk 280,000 for December. Thirty percent of a month's inventory
purchases are paid during the month of purchase. The accounts payable remaining from November's
inventory purchases total Tk 161,000, all of which will be paid in December.
d. Selling and administrative expenses are budgeted at Tk 430,000 for December. Of this amount,
Tk 50,000 is for depreciation.
e. A new web server for the Marketing Department costing Tk 76,000 will be purchased for cash
during December, and dividends totaling Tk 9,000 will be paid during the month.
f. The company maintains a minimum cash balance of Tk 20,000. An open line of credit is available
from the company's bank to bolster the cash position as needed.
Requirements:
A) Prepare a schedule of expected cash collections for December.
B) Prepare a schedule of expected cash disbursements for merchandise purchases for December.
C) Prepare a cash budget for December. Indicate in the financing section any borrowing that will be
needed during the month. Assume that any interest will not be paid until the following month.
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by stepSolved in 3 steps

Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Whirly Corporation's contribution format income statement for the most recent month is shown below: Sales (7,800 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $ 265,200 148, 200 117,000 55,700 $ 61,300 Required: (Consider each case independently): Per Unit $ 34.00 19.00 $15.00 1. What would be the revised net operating income per month if the sales volume increases by 90 units? 1. Revised net operating income 2. Revised net operating income 3. Revised net operating income 2. What would be the revised net operating income per month if the sales volume decreases by 90 units? 3. What would be the revised net operating income per month if the sales volume is 6,800 units?arrow_forwardSanjay Company has monthly fixed costs of $112.000. The variable costs are $5.00 per unit. The sales price per unit is $20.00 and they sold 8,000 units. Sanjay Company's total sales revenue is A. $120,000 B. $8,C00 C. $112,000 D. $160.000arrow_forwardData concerning Follick Corporation's single product appear below: Selling price per unit $ 200.00 Variable expense per unit $ 72.00 Fixed expense per month $ 135,680 The break-even in monthly dollar sales is closest to: (Round your intermediate calculations to 2 decimal places.)arrow_forward
- Whirly Corporation's contribution format income statement for the most recent month is shown below: Per Unit $ 33.00 18.00 $ 15.00 Sales (8,800 units) Variable expenses Contribution margin Fixed expenses Net operating income Required: (Consider each case independently): Total $ 290,400 158,400 132,000 54,100 $ 77,900 1. What would be the revised net operating income per month if the sales volume increases by 40 units? 2. What would be the revised net operating income per month if the sales volume decreases by 40 units? 3. What would be the revised net operating income per month if the sales volume is 7,800 units? 1. Revised net operating income 2. Revised net operating income 3. Revised net operating incomearrow_forwardNn1.arrow_forwardim.9arrow_forward
- CVP Analysis, *What IT?" AnalysisKevin Co. projected contribution-format income statement for the upcoming month is shownBelow Sales (500 units) $10000Variable expenses. 4000Contributions margin. 6000Fixed expenses. 1000Net operating income. 5000Required:a.) Compute the breakeven point in units.b) Compute the breakeven paint in dollars.c.) If the company wishes to earn a monthly target profit of $10,000, how many units must be sold each month?d.) Compute the company's margin of safety. State your answer in both dollar and percentage terms,e.) The company's manager thinks that adding a salaried sales staff member at a cost of 52,000 per month will increase sales by $4,000 per month. If he is correct, what will be the net dollar advantage or disadvantage of making this change?t.) Refer to the original data, the company's manager believes that a new production process will improve profitability. He plans to add new machinery that will cut variable expenses…arrow_forwardWhirly Corporation's contribution format income statement for the most recent month is shown below: Total $ 268,600 150, 100 118,500 54,300 Per Unit $ 34.00 19.00 $ 15.00 $ 64,200 Sales (7,900 units) Variable expenses Contribution margin Fixed expenses Net operating income. Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 30 units? 2. What would be the revised net operating income per month if the sales volume decreases by 30 units? 3. What would be the revised net operating income per month if the sales volume is 6,900 units? 1. Revised net operating income 2. Revised net operating income 3. Revised net operating incomearrow_forwardDarrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education


Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,

Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON

Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education

Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education