Flora’s Flats produces comfortable and portable women’s shoes designed to be worn as a second pair of shoes after a formal event.  The company has the following financial information:    The company’s sales price is $20 per unit.  The variable costs of producing flats is $6 per unit.  The company expects to have fixed costs of $10,000 next year.  The company expects to sell 1,000 pairs of flats next year.  Assume no taxes a. Prepare a budgeted contribution format income statement. b. Compute the margin of safety in both dollar and percentage terms. c. Compute the degree of operating leverage. d. If sales increase by 20% in the following year, how much would net income increase (use the degree of operating leverage to compute your answer).

Yarn​ Basket, Ltd., sells handminus−knit scarves. Each scarf sells for $35. The company pays $350 to rent a vending space for one day. The variable costs are $10 per scarf. What total revenue amount does the company need to earn to break​ even?

Silvana Products sells camping equipment. One of the company’s products, a camp lantern, sells for $90 per unit. Variable expenses are $63 per lantern, and fixed expenses associated with the lantern total $135,000 per month. Required: i. Compute the company’s break-even point in number of lanterns and in total sales dollars. ii. If the variable expenses per lantern increase as a percentage of the selling price, will it result in a higher or a lower break-even point? Why? (Assume that the fixed expenses remain unchanged.) iii. At present, the company is selling 8,000 lanterns per month. The sales manager is convinced that a 10% reduction in the selling price will result in a 25% increase in the number of lanterns sold each month. Prepare two contribution format income statements, one under present operating conditions, and one as operations would appear after the proposed changes. Show both total and per unit data on your statements. iv. Refer to the data in (3) above. How many lanterns…

Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $20 per unit. Variable expenses are $8 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows:     Sales $ 400,000 Variable expenses   160,000 Contribution margin   240,000 Fixed expenses   180,000 Net operating income $ 60,000     Required: Answer each question independently based on the original data:   1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in dollar sales. 3. If this year's sales increase by $75,000 and fixed expenses do not change, how much will net operating income increase?   4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's sales to increase by 20%. Using the degree of operating leverage from last year, what percentage increase in net operating income will the company realize this year?   5. The sales manager is…

Problem Solving: Lila Battle has determined that the annual demand for number 6 screws is 100,000 screws. Lila, who works in her brother’s hardware store, is in charge of purchasing. She estimates that it costs $10 every time an order is placed. This cost includes her wages, the cost of the forms used in placing the order, and so on. Furthermore, she estimates that the cost of carrying one screw in inventory for a year is one-half of 1 cent. Assume that the demand is constant throughout the year. a. How many number 6 screws should Lila order at a time if she wishes to minimize total inventory cost? b. How many orders per year would be placed? What would the annual ordering cost be? c. What would the average inventory be? What would the annual holding cost be?

Jen and Barry's ice cream shop charges $1.45 for a cone. Variable expenses are $0.22 per cone, and fixed costs total $2,500 per month. A Valentine's Day promotion is being planned for the second week of February. During this week, a person buying a cone at the regular price would receive a free cone for a friend. It is estimated that 650 additional cones would be sold and that 850 cones would be given away. Advertising costs for the promotion would be $135. Required: a. Calculate the effect of the promotion on operating income for the second week of February. b. Do you think the promotion should occur? Complete this question by entering your answers in the tabs below. Required A Require B Do you think the promotion should occur?

How many T-shirts must the company sell this year to break even?

Sandy Bank, Incorporated, makes one model of wooden canoe. Partial information is given below. Required: 1. Complete the following table. 2. Suppose Sandy Bank sells its canoes for $560 each. Calculate the contribution margin per canoe and the contribution margin ratio. 3. This year Sandy Bank expects to sell 760 canoes for $560 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 $560 each. 5. Suppose Sandy Bank wants to earn $72,000 profit this year. Calculate the number of canoes that must be sold to achieve this target. Sandy Bank sells its canoes for $560 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…

Diamond Boot Factory normally sells its specialty boots for $35 a pair. An offer to buy 125 boots for $31 per pair was made by an organization hosting a national event in Norfolk. The variable cost per boot is $12, and special stitching will add another $2 per pair to the cost. Determine the differential income or loss per pair of boots from selling to the organizatio

1. If the company want to achieve target net income $800,000 and the tax rate is 30%, calculate how many units to be sold to achieve those targets? 2. The owner estimates that if he can spend an additional $75,000 towards sales promotion,sales in unit may increase by 30%. What should Mr. Budi’ decision be?