E6-24 (Algo) Computing Target Profit, Preparing Contribution Margin Income Statement, ComputingMargin of Safety [LO 6-2, 6-3]Erin Shelton, Incorporated, wants to earn a target profit of $960,000 this year. The company's fixed costs are expected to be$1,320,000 and its variable costs are expected to be 40 percent of sales. Erin Shelton, Incorporated, earned $860,000 in profit lastyear.Required:1. Calculate break-even sales for Erin Shelton, Incorporated.2. Prepare a contribution margin income statement on the basis of break-even sales.3. Calculate the required sales to meet the target profit of $960,000.4. Prepare a contribution margin income statement based on sales required to earn a target profit of $960,000.5. When the company earns $960,000 of net income, what is its margin of safety and margin of safety as a percentage of sales?Complete this question by entering your answers in the tabs below.Required 1 Required 2 Required 3 Required 4Calculate break-even sales for Erin Shelton, Incorporated.Break-Even SalesRequired 5Required 1Required 2 >< Prev7 of 8Next >ПетрSav

MARGINAL COSTING INCOME STATEMENTMarginal Costing Income Statement is One of the Important Cost…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A company is making plans for next year, using cost-volume-profit analysis as its planning tool. Next year's sales data about its product are as follows Selling price P60 Variable manufacturing costs per unit 22.50 Variable selling and administrative costs 4.5 Fixed operating costs (60% is manufacturing costs) P159,500 Income tax rate 30% How much should sales be next year if the company wants to earn profit after tax of P23,100, the same amount that it earned last year?
E6-24 (Algo) Computing Target Profit, Preparing Contribution Margin Income Statement, Computing Margin of Safety [LO 6-2, 6-3] Erin Shelton, Incorporated, wants to earn a target profit of $880,000 this year. The company's fixed costs are expected to be $1,160,000 and its variable costs are expected to be 60 percent of sales. Erin Shelton, Incorporated, earned $780,000 in profit last year. Required: 1. Calculate break-even sales for Erin Shelton, Incorporated. 2. Prepare a contribution margin income statement on the basis of break-even sales. 3. Calculate the required sales to meet the target profit of $880,000. 4. Prepare a contribution margin income statement based on sales required to earn a target profit of $880,000. 5. When the company earns $880,000 of net income, what is its margin of safety and margin of safety as a percentage of sales? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Calculate break-even…
Calculate the contribution margin of a product for a service company if revenues are $50,000, variable expenses are $30,000, and fixed expenses are $15,000. a.) $ 20,000 b.) $80,000 c.) $35,000 d.) $5,000
A company requires $1305600 in sales to meet its operating income target. Its contribution margin is 30%, and fixed costs are $230400. What is the target operating income?
Problem II. Omega Enterprises sells two products, Model E100 and F900. Monthly sales and the contribution margin ratios for the two products, follow: Product E100 F900 Total Sales P 700,000 P 300,000 P 1,000,000 Contribution margin ratio 60% 70% The Company’s fixed expenses total P598,500 per month. What is the company’s total contribution margin ratio? What is the company’s total net operating income? The break-even point for the company based on the current sales mix is ______.
How many units will Cadre need to sell in order to realize a target profit of $300,000? Use commas as needed (i.e. 1,234). What dollar sales will Cadre need to generate in order to realize a target profit of $300,000? Rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345). Construct a contribution margin income statement for the month of November that reflects $2,400,000 in sales revenue for Cadre, Inc. Rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345). Cadre Inc. Contribution Margin Income Statement For the Month of November
The following information is for Gable, Inc. and Harlowe, Inc. for the recent year. Harlowe, Inc. $800,000 200,000 600,000 400,000 $200,000 Sales Variable costs. Contribution margin Fixed costs Income from operations Gable, Inc. $800,000 400,000 400,000 200,000 $200,000 What total amount of net income will Harlowe, Inc. earn if it experiences a 10 percent increase in revenue?
Contribution Margin Ratio a. Young Company budgets sales of $900,000, fixed costs of $44,600, and variable costs of $198,000. What is the contribution margin ratio for Young Company? (Enter your answer as a whole number.)_________% b. If the contribution margin ratio for Martinez Company is 49%, sales were $757,000, and fixed costs were $255,940, what is the income from operations?$__________
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…
-18. Contribution Margin Concepts DiPinto Electric Guitars & Basses sells musical instruments in Philadelphia. Assume the follow- ing information comes from the company's prior year records. Chapter 15 Cost-Volume-Profit Analysis and Fixed Sales. Variable Total Costs Goods sold. $800,000 Labor. $346,000 Supplies Utilities $180,000 40,000 10,000 9,000 48,000 4,000 Rent 5,000 Advertising 10,000 10,000 Miscellaneous. 5,000 Total costs. $267,000 $400,000 (667,000) Net income. $133,000 REQUIRED a. Determine the annual break-even dollar sales volume. b. Determine the current margin of safety in dollars. C. Prepare a cost-volume-profit graph for the guitar shop. Label both axes in dollars with maxi- mum values of $1,000,000. Draw a vertical line on the graph for the current ($800,000) sales level, and label total variable costs, total fixed costs, and total profits at $800,000 sales. ". What is the annual break-even dollar sales volume if management makes a decision that in- creases fixed…
A business has sales of $3800, a Contribution Margin of 25%, fixed costs of $791.66666666667, and a Net profit of $158.33333333333}. If $316.66666666667 (of the $791.66666666667 in fixed costs) are Marketing expenses and the new budget increases Marketing expenses 30%, How much should be the sales to maintain the $158.33333333333} Net Profit (Contribution Margin will stay at 25%)?
Fence Industries is preparing its annual profit plan. As part of its analysis of the profitability of its customers, management estimates that the $15,000 for sales support should be assigned to the individual customers from the information given as follows: Multiple Choice Units purchased Purchase orders (annually) What is the amount of the sales support costs that should be allocated to Customer B, assuming Fence uses purchases orders to compute activity-based costs? $3,000 $6,000 $9,000 Customer A 200,000 $12,000 Customer B 300,000 32 8

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