bedCruse Cleaning offers residential and small office cleaning services. An average cleaning service has the following price and costs.Sales priceVariable costsFixed costs$127.00 per service89.00 per service119,548 per yearCruse Cleaning is subject to an income tax rate of 22 percent.Required:a. How many cleaning services must Cruse Cleaning sell in a year to break even?ookb. How many cleaning services must Cruse Cleaning sell in a year to earn an annual operating profit of $32,604 after taxes?a Required sales in a year to break evenintrencesb. Required sales in a year to earn an annual operating profit of $32,604 after taxes:cleaning servicescleaning services

Solution:Break-even point refers to the point where operating profit of the firm is zero, i.e. the…

Answered: Cruse Cleaning offers residential and…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 5CE: Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each...

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Keleher Industries manufactures pet doors and sells them directly to the consumer via their web site. The marketing manager believes that if the company invests in new software, they will increase their sales by 10%. The new software will increase fixed costs by $400 per month. Prepare a forecasted contribution margin income statement for Keleher Industries reflecting the new software cost and associated increase in sales. The previous annual statement is as follows:
Reubens Deli currently makes rolls for deli sandwiches it produces. It uses 30,000 rolls annually in the production of deli sandwiches. The costs to make the rolls are: A potential supplier has offered to sell Reuben the rolls for $0.90 each. If the rolls are purchased, 30% of the fixed overhead could be avoided, If Reuben accepts the offer, what will the effect on profit be?
Cruse Cleaning offers residential and small office cleaning services. An average cleaning service has the following price and costs. Sales price $ 128.00 per service Variable costs 90.00 per service Fixed costs 124,982 per year Cruse Cleaning is subject to an income tax rate of 22 percent. Required: How many cleaning services must Cruse Cleaning sell in a year to break even? How many cleaning services must Cruse Cleaning sell in a year to earn an annual operating profit of $34,086 after taxes?
Currently, Sweet Treats Bakery sells 1,200 cupcakes per month. The owners would like to increase net income above what is currently earned. Fixed costs are $1,500 per month and their contribution margin is $3 per cupcake. What would be a reasonable net income goal? O $1,800 O $2,600 O $2,100 O $5,600
Red Hawk Enterprises sells handmade clocks. Its variable cost per clock is $6.50, and each clock sells for $16.00. Required: Calculate Red Hawk's unit contribution margin. Calculate Red Hawk's contribution margin ratio. Suppose Red Hawk sells 2,050 clocks this year. Calculate the total contribution margin. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Suppose Red Hawk sells 2,050 clocks this year. Calculate the total contribution margin. Note: Round your answers to 2 decimal places.
Which of the following is an example of a mixed cost behavior? a. A rental van charges $50 / day for the first 100 miles, and $0.42 per mile beyond100 miles.b. A piece of equipment can be leased for a year for a fee of $14,000 regardless ofhow many hours it is operated.c. A vacation home charges $250 per day regardless of the number of occupants.d. A local utility charges $0.14 per kilowatt-hour of energy consumed.
Biscayne's Rent-A-Ride rents two models of automobiles: the standard and the deluxe. Information follows: De luxe $ 46.00 18.40 Rental price per day Variable cost per day Biscayne's total fixed cost is $13,120 per month. Required: 1. Determine the contribution margin per rental day and contribution margin ratio for each model that Biscayne's offers. 2. Which model would Biscayne's prefer to rent? 3. Calculate Biscayne's break-even point if the product mix is 50/50. 4. Calculate the break-even point if Biscayne's product mix changes so that the standard model is rented 75 percent of the time and the deluxe model is rented for only 25 percent. Standard $ 40.00 14.40 5. Calculate the break-even point if Biscayne's product mix changes so that the standard model is rented 25 percent of the time and the deluxe model is rented for 75 percent. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Unit Contribution Margin Contribution Margin Ratio Required 3…
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
Homoward Hardware buys cat liter for $6 less 20% per bag. The store's overhead is 45% of cost and the owner requires a profit of 20% of cost (a) (b) (c) (d) (e) (7) For how much should the bags be sold? What is the amount of markup included in the selling price? What is the rate of markup based on selling price? What is the rate of markup based on cost? What is the break-even price? What operating profit or loss is made if a bag is sold for $7 509
Hawk Homes, Ic., makes one type of birdhouse that it sells for $30.00 each. Its variable cost is $13.50 per house, and its fixed costs total $14,239.50 per year. Hawk currently has the capacity to produce up to 2,800 birdhouses per year, so its relevant range is 0 to 2,800 houses. Required: 1. Prepare a contribution margin income statement for Hawk assuming it sells 1,110 birdhouses this year. 2. Without ancaleuletione, detonmine llawks total contribution morgin if the company breake 3. Сн 4. Calculate Hawk's break-even point in number of units and in sales revenue. 5. Suppose Hawk wants to earn $21,000 this year. Determine how many birdhouses it must sell to generate this amount of profit. O margm per umt Omarginatio. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Prepare a contribution margin income statement for Hawk assuming it sells 1,110 birdhouses this year. (Enter your answers…
Hawk Homes, Ic., makes one type of birdhouse that it sells for $30.00 each. Its variable cost is $13.50 per house, and its fixed costs total $14,239.50 per year. Hawk currently has the capacity to produce up to 2,800 birdhouses per year, so its relevant range is 0 to 2,800 houses. Required: 1. Prepare a contribution margin income statement for Hawk assuming it sells 1,110 birdhouses this year. 2. Without any calculations, determine Hawk's total contribution margin if the company breaks even. 3. Calculate Hawk's contribution margin per unit and its contribution margin ratio. 4. Calculate Hawk's break-even point in number of units and in sales revenue. 5. Suppose Hawk wants to earn $21,000 this year. Determine how many birdhouses it must sell to generate this amount of profit. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Prepare a contribution margin income statement for Hawk assuming it sells 1,110 birdhouses…
The Tick Tock Clock Company sells a particular clock for $75. The variable costs are $15 per clock and the breakeven point is 230 clocks. The company expects to sell 280 clocks this year. If the company actually sells 355 clocks, what effect would the sale of additional 75 clocks have on operating income? Explain your answer The sale of an additional 75 dlocks would aller an. operating income by the amount of The total effect would amount to 4

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