Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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- Please help me with show all calculation thankuarrow_forwardMargin of Safety Ciganda Company produces and sells strings of colorful indoor/outdoor lights for holiday display to retailers for $8.10 per string. The variable costs per string are as follows: Direct materials Direct labor Variable factory overhead Variable selling expense $2.90 1.70 0.48 0.42 Fixed manufacturing cost totals $245,650 per year. Administrative cost (all fixed) totals $237,950. The company expects to sell 225,000 strings of lights next year. Required: 1. Calculate the break-even point in units. units 2. Calculate the margin of safety in units. units 3. Calculate the margin of safety in dollars. 4. Conceptual Connection: Suppose Ciganda actually experiences a price decrease next year, while all other costs and the number of units sold remain the same. Would this incre or decrease risk for the company? (Hint: Consider what would happen to the number of break-even units and to the margin of safety.)arrow_forwardOwearrow_forward
- Margin of Safety Comer Company produces and sells strings of colorful indoor/outdoor lights for holiday display to retailers for $9.65 per string. The variable costs per string are as follows: Direct materials $1.87 Direct labor 1.70 Variable factory overhead 0.57 Variable selling expense 0.42 Fixed manufacturing cost totals $319,143 per year. Administrative cost (all fixed) totals $252,973. Comer expects to sell 250,900 strings of light next year. Required: 1. Calculate the break-even point in units. units 2. Calculate the margin of safety in units. units 3. Calculate the margin of safety in dollars.$ 4. Conceptual Connection: Suppose Comer actually experiences a price decrease next year while all other costs and the number of units sold remain the same. Would this increase or decrease risk for the company? (Hint: Consider what would happen to the number of break-even units and to the margin of safety.)arrow_forwardMargin of Safety Head-First Company plans to sell 5,180 bicycle helmets at $72 each in the coming year. Unit variable cost is $45 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $49,500 (includes fixed factory overhead and fixed selling and administrative expense). Break-even units equal 1,833. Required: 1. Calculate the margin of safety in terms of the number of units. units 2. Calculate the margin of safety in terms of sales revenue.arrow_forwardDefine the following terms with example. RELEVANT COSTSUNK COSTOPPORTUNITY COSTAVOIDABLE AND UNAVOIDABLE COSTINCREMENTAL COSTBREAK-EVEN POINT(B)KPR manufactures installs lawn sod in home yards. The company’s most recent monthly contribution format income statement follows: In RsAmount Sales 80,000 Variable expenses 32,000 Contribution margin 48,000 Fixed expenses -38,000 Net operating income 10,000 Required:Compute the company’s degree of operating leverage.Using the degree of operating leverage, estimate the impact on net operating income of a 5% increase in sales.Verify your estimate from part (2) above by constructing a new contribution format income statement for the company assuming a 5% increase in sales.arrow_forward
- i need the answer quicklyarrow_forwardMake-or-Buy Decision Somerset Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $60 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 45% of direct labor cost. The unit costs to produce comparable carrying cases are expected to be as follows: Direct materials $27 Direct labor 16 Factory overhead (45% of direct labor) 7.2 Total cost per unit $50.2 If Somerset Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factory overhead costs associated with the cases are expected to be 14% of the direct labor costs. a. Prepare a differential analysis dated April 30 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the carrying case. If required, round your answers to two decimal places. If an amount is zero, enter "0". Differential Analysis Make Carrying Case (Alt. 1) or Buy…arrow_forwardgodoarrow_forward
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