Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $20 per unit. Variable costs are $8 per unit, and fixed costs total $240,000 per year. a) What is the company's CM ratio? Please make sure your final answer(s) are in percentage form and are accurate to the nearest whole percent. (For example: 12%) CM ratio= % b) Use the CM ratio to determine the break-even point in sales dollars. Please make sure your final answer(s) are accurate to the nearest whole number. Break-even point = $ c) Due to an increase in demand, the company estimates that sales will increase by $80,000 during the next year. By how much should operating income increase assuming that fixed costs do not change? Please make sure your final answer(s) are accurate to the mearest whole number. Operating income increases by $

Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $20 per unit. Variable costs are $8 per unit, and fixed costs total $240,000 per year. a) What is the company's CM ratio? Please make sure your final answer(s) are in percentage form and are accurate to the nearest whole percent. (For example: 12%) CM ratio= % b) Use the CM ratio to determine the break-even point in sales dollars. Please make sure your final answer(s) are accurate to the nearest whole number. Break-even point = $ c) Due to an increase in demand, the company estimates that sales will increase by $80,000 during the next year. By how much should operating income increase assuming that fixed costs do not change? Please make sure your final answer(s) are accurate to the mearest whole number. Operating income increases by $

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 10E: Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22...

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Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of $15 each in the coming year. Total variable costs equal $702,000. Total fixed costs equal $7,600,000. Required: 1. What is the contribution margin per unit? Round your answer to the nearest cent. What is the contribution margin ratio? Round your answer to two decimal places. (Express as a decimal-based answer rather than a whole percent amount.) 2. Calculate the sales revenue needed to break even. Round your answer to the nearest dollar. 3. Calculate the sales revenue needed to achieve a target profit of $260,000. Round your answer to the nearest dollar. 4. What if the average price per unit increased to $16.50? Recalculate the following: a. Contribution margin per unit. Round your answer to the nearest cent. b. Contribution margin ratio. Enter your answer as a decimal value (not a percentage), rounded to four decimal places. c. Sales revenue needed to break even. In your computations,…
Schylar Pharmaceuticals, Inc., plans to sell 120,000 units of antibiotic at an average price of $18 each in the coming year. Total variable costs equal $820,800. Total fixed costs equal $7,600,000. 1. What if the average price per unit increased to $19.50? Recalculate the following: a. Contribution margin per unit. Round your answer to the nearest cent. b. Contribution margin ratio. Enter your answer as a decimal value (not a percentage), rounded to four decimal places. c. Sales revenue needed to break even. In your computations, use your rounded answer from part (4-b) above for the contribution margin ratio, and round your final answer to the nearest dollar. d. Sales revenue needed to achieve a target profit of $270,000. In your computations, use your rounded answer from part (4-b) above for the contribution margin ratio, and round your final answer to the nearest dollar.
Madlock, Inc. sells a product with a contribution margin of $10 per unit. Fixed costs are $1,800 per month. How many units must Madlock sell to break even? Begin by showing the formula and then entering the amounts to calculate the units Madlock must sell to break even. (Abbreviation used: CM = contribution margin. Complete all input fields. Enter a "0" for items with a zero value.) Target profit ) = Fixed costs ▼ + + HH CM per unit TOD Carmen Required sales in units
Sheridan Recreation Products sells the Amazing Foam Frisbee for $19. The variable cost per unit is $6; fixed costs are $26,000 per month. (a) Your Answer Correct Answer Your answer is correct. What is the breakeven point in units? In sales dollars? (Use your answer of breakeven units to calculate the breakeven point in dollars. Round answers to O decimal places, eg. 5,275) The breakeven point The breakeven sales (b) eTextbook and Media Solution $ eTextbook and Media Save for Later 2000 frisbees 38000 How many frisbees must Sheridan sell to earn $39,000 in monthly operating income? (Round answer to O decimal places, eg. 5,275) frisbees Attempts: unlimited Attempts: unlimited Submit Ar (c) The parts of this question must be completed in order. This part will be available when you complete the part above. (d) The parts of this question must be completed in order. This part will be available when you complete the part above.
Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22 each in the coming year. Total variable costs equal 1,086,800. Total fixed costs equal 8,000,000. (Round all ratios to four significant digits, and round all dollar amounts to the nearest dollar.) Required: 1. What is the contribution margin per unit? What is the contribution margin ratio? 2. Calculate the sales revenue needed to break even. 3. Calculate the sales revenue needed to achieve a target profit of 245,000. 4. What if the average price per unit increased to 23.50? Recalculate: a. Contribution margin per unit b. Contribution margin ratio (rounded to four decimal places) c. Sales revenue needed to break even d. Sales revenue needed to achieve a target profit of 245,000
You Break It, We Fix-it Repair Shop has a monthly target profit of $18,900. Variable costs are 62% of sales, and monthly fixed costs are $7,500. (Note: 100% of Sales = Variable Costs + Contribution Margin). (Round your answers to two decimal places when needed and use rounded answers for all future calculations). 1. Compute the monthly margin of safety in dollars if the shop achieves its income goal. (Fixed Costs (Fixed Costs + + + + Expected sales - Target Profit) Target Profit) 1 1 Contribution Margin per ratio (%) Contribution Margin ratio (%) = = = = Required Sales in Dollars to Break-even Required Sales in Dollars to meet Target Profit Break-even sales = Margin of safety in dollars 2. Express what You Break It, We Fix-it Repair Shop margin of safety is as a percentage of target ales. Margin of safety in dollars/ Expected sales in dollars = Margin of safety ratio (%)
Barkley Company sells two products, red cups and black mugs. Barkley predicts that it will sell 2,000 red cups and 600 black mugs in the next period. The unit contribution margins for red cups and black mugs are $2.20 and $3.90, respectively. What is the weighted average unit contribution margin? (Round the final answer to the nearest cent.) O A. $0.90 O B. $2.59 O C. $3.37 O D. $7.33
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…
Sooner Industries charges a price of $88 and has fixed cost of $301,000. Next year, Sooner expects to sell 15,600 units and make operating income of $172,000. What is the variable cost per unit? What is the contribution margin ratio? Note: Round your variable cost per unit answer to the nearest cent. Enter the contribution margin ratio as a percentage, rounded to two decimal places.
Super Sales Company is the exclusive distributor for a high-quality knapsack. The product sells for $100 per unit and has a CM ratio of 40%. The company's fixed expenses are $459,000 per year. The company plans to sell 12,000 knapsacks this year. Required: 1. What are the variable expenses per unit? Variable expenses per unit 2. Use the equation method for the following: a. What is the break-even point in units and in sales dollars? Break-even point in units Break-even point in sales dollars b. What sales level in units and in sales dollars is required to earn an annual profit of $99,000? Sales in units Sales in dollars c. What sales level in units is required to earn an annual after-tax profit of $99,000 if the tax rate is 25%? Sales in units d. Assume that through negotiation with the manufacturer, Super Sales Company is able to reduce its variable expenses by $5 per unit. What is the company's new break-even point in units and in sales dollars? (Do not round intermediate…
Peppy Quadcopters plans to sell a standard quadcopter (toy drone) for $70 and a deluxe quadcopter for $90. Peppy purchases the standard quadcopter for $60 and the deluxe quadcopter for $65. Management expects to sell two deluxe quadcopters for every three standard quadcopters. The company's monthly fixed expenses are $16,000. How many of each type of quadcopter must Peppy sell monthly to breakeven? To earn $12,000?