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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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![Part 2.
Bhiner Company prepared the following contribution format income statement based
on a sales volume of 1,000 units (the relevant range of production is 500 units to
1,500 units).
Sales
$25,000
Variable expenses
10.000
ontribution margin
15,000
+Fixed expenses
8.000
Net operating income
$ 7.000
Required:
(Answer each question independently and always refer to the original data unless
instructed otherwise.) (Show all work/calculations. No credit will be given without](https://content.bartleby.com/qna-images/question/ffb2a5ed-e2cb-46b4-8ca3-e3b469f44323/85ea7bf5-79c1-4b47-80d3-aadea1224bd1/1jry5m_thumbnail.jpeg)
Transcribed Image Text:Part 2.
Bhiner Company prepared the following contribution format income statement based
on a sales volume of 1,000 units (the relevant range of production is 500 units to
1,500 units).
Sales
$25,000
Variable expenses
10.000
ontribution margin
15,000
+Fixed expenses
8.000
Net operating income
$ 7.000
Required:
(Answer each question independently and always refer to the original data unless
instructed otherwise.) (Show all work/calculations. No credit will be given without
![f. If the selling price increases by $4 per unit and the sales volume decreases by 200
units, what would be the net operating income?
If the variable cost per unit increases by $2, spending on advertising increases by
g.
$1.000, and unit sales increase by 240 units, what would be the net operating
income?
h. What is the break-even point in unit sales?
i. What is the break-even point in dollar sales?
i. How units must be sold to achieve a target profit of $7,500?
many](https://content.bartleby.com/qna-images/question/ffb2a5ed-e2cb-46b4-8ca3-e3b469f44323/85ea7bf5-79c1-4b47-80d3-aadea1224bd1/a32idh8_thumbnail.jpeg)
Transcribed Image Text:f. If the selling price increases by $4 per unit and the sales volume decreases by 200
units, what would be the net operating income?
If the variable cost per unit increases by $2, spending on advertising increases by
g.
$1.000, and unit sales increase by 240 units, what would be the net operating
income?
h. What is the break-even point in unit sales?
i. What is the break-even point in dollar sales?
i. How units must be sold to achieve a target profit of $7,500?
many
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- 1-Due to an increase in labor rates, the company estimates that variable expenses will increase by $3 per ball next year. If this change takes place and the selling price per ball remains constant at $25, what will be the new CM ratio and break-even point in balls? 2. Refer to the data in (2) above. If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating income, $90,000, as last year? 3. Refer again to the data in (2) above. The president feels that the company must raise the selling price of its basketballs. If Northwood Company wants to maintain the same CM ratio as last year, what selling price per ball must it charge next year to cover the increased labor costs?arrow_forwardNow suppose that annual unit sales, variable cost, and unit price are equal to their respective expected values—that is, there is no uncertainty. Determine the company's annual profit for this scenario. Round answer to a whole number, if needed.$arrow_forwardusing the price p=20 - .05x, use the Revenue function to find the marginal Revenue function R'(x), Find a. R'(100)= b. R'(175)= c. R'(250)= The marginal Revenue R'(x) approximates how the revenue will change on the sale of the next item. a. Given R(100) = 642 and R'(100)= 18 then R(101) ≈ b. Given R(400) = 16,250 and R'(400)= -10 then R(401) ≈ c. Given R(1000) = 3500 and R'(1000) = 3 then R(1001) ≈arrow_forward
- If the selling price per unit is $60, the variable expense per unit is $20, and total fixed expenses are $240,000, what are the breakeven sales in dollars?arrow_forwardI need the answers of 1-6.arrow_forwardP Company has provided the following data: Sales Price per unit: $50. Variable Cost per unit: $30; Fixed Cost: $135,000 Expected Sales: 20,000 units. d. Determine the margin of safety in dollars. e. If the company wants to have net income of $70,000, how many units must they sell.arrow_forward
- Assuming all other things are the same, selling price per unit must have even point. Select one: O A. remained the same O B. increased O C. increased first, then decreased O D. decreased if there was a decrease in the break-arrow_forwardHow do you calculate the break-even point in sales? Contribution margin fixed costs Fixed costs total sales Profit variable costs Fixed costs contribution margin % 0,000arrow_forward
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