FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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CVP analysis Current operating income for Bay Area Cycles Co. is $70,000. Selling price per unit is $100, the contribution margin ratio is 35%, and fixed expense is $280,000.
Required:
Calculate Bay Area Cycle’s per unit variable expense and contribution margin.
How many units are currently being sold? How many additional unit sales would be necessary to achieve operating income of $105,000?
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- Given breakeven sales in units of 32,000 and a unit contribution margin of $10, how many units must be sold to reach a target operating income of $16,000? 1,600 33,600 30,600 160,000arrow_forwardgnment i ces Saved Current operating income for Bay Area Cycles Company is $22,000. Selling price per unit is $100, the contribution margin ratio is 25%, and fixed expense is $88,000. Required: 1. Calculate Bay Area Cycle's per unit variable expense and contribution margin. How many units are currently being sold? 2. How many additional unit sales would be necessary to achieve operating income of $65,000? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate Bay Area Cycle's per unit variable expense and contribution margin. How many units are currently being sold? Revenue Variable expense Contribution margin Fixed expense Operating income Per Unit Volume $ 100.00 Total Ratio 100 % % 25 % $ (88,000) 22,000 Required 1 Required 2 > Harrow_forwardDevelop an equation for total monthly production costs. Total Monthly Production costs = Fixed Costs + Variable Costs = _____________ + ($ per unit X Number of units) Predict total costs for a monthly production volume of 9,000 units.arrow_forward
- need answer of this questionarrow_forwardCVP 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_forwardFor the coming year, Cleves Company anticipates a unit selling price of $80, a unit variable cost of $40, and fixed costs of $248,000. Required: 1. Compute the anticipated break-even sales (units). units 2. Compute the sales (units) required to realize a target profit of $96,000. unitsarrow_forward
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