For the coming year, Cleves Company anticipates a unit selling price of $106, a unit variable cost of $53, and fixed costs of $530,000.
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Break-Even Sales and Cost-Volume-Profit Chart
For the coming year, Cleves Company anticipates a unit selling price of $106, a unit variable cost of $53, and fixed costs of $530,000.
Required:
1. Compute the anticipated break-even sales (units).
fill in the blank 1 units
2. Compute the sales (units) required to realize a target profit of $227,900.
fill in the blank 2 units
3. Construct a cost-volume-profit chart, assuming maximum sales of 20,000 units within the relevant range. From your chart, indicate whether each of the following sales levels would produce a profit, a loss, or break-even.
$1,484,000 |
|
|
|
$1,325,000 |
|
|
|
$1,060,000 |
|
|
|
$795,000 |
|
|
|
$636,000 |
|
|
4. Determine the probable income (loss) from operations if sales total 16,000 units. If required, use the minus sign to indicate a loss.
Step by step
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- Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?Klamath Company produces a single product. The projected income statement for the coming year is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. 2. Suppose 10,000 units are sold above break-even. What is the operating income? 3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue. (Note: Round the contribution margin ratio to four decimal places, and round the sales revenue to the nearest dollar.) Suppose that revenues are 200,000 more than expected for the coming year. What would the total operating income be?Refer to Cornerstone Exercise 3.4 for data on Dohini Manufacturing Companys purchasing cost and number of purchase orders. The controller for Dohini Manufacturing ran regression on the data, and the coefficients shown by the regression program are: Required: 1. Construct the cost formula for the purchasing activity showing the fixed cost and the variable rate. 2. If Dohini Manufacturing Company estimates that next month will have 430 purchase orders, what is the total estimated purchasing cost for that month? (Round your answer to the nearest dollar.) 3. What if Dohini Manufacturing wants to estimate purchasing cost for the coming year and expects 5,340 purchase orders? What will estimated total purchasing cost be? (Round your answer to the nearest dollar.) What is the total fixed purchasing cost? Why doesnt it equal the fixed cost calculated in Requirement 1?
- Sales Needed to Earn Target Income Chillmax Company plans to sell 3,500 pairs of shoes at 60 each in the coming year. Variable cost is 35% of the sales price; contribution margin is 65% of the sales price. Total fixed cost equals 78,000 (includes fixed factory overhead and fixed selling and administrative expense). Required: 1. Calculate the sales revenue that Chillmax must make to earn operating income of 81,900 by using the point in sales equation. 2. Check your answer by preparing a contribution margin income statement based on the sales dollars calculated in Requirement 1.Suppose a company finds that shipping cost is 3,560 each month plus 6.70 per package shipped. What is the cost formula for monthly shipping cost? Identify the independent variable, the dependent variable, the fixed cost per month, and the variable rate.Olivian Company wants to earn 420,000 in net (after-tax) income next year. Its product is priced at 275 per unit. Product costs include: Variable selling expense is 14 per unit; fixed selling and administrative expense totals 290,000. Olivian has a tax rate of 40 percent. Required: 1. Calculate the before-tax profit needed to achieve an after-tax target of 420,000. 2. Calculate the number of units that will yield operating income calculated in Requirement 1 above. (Round to the nearest unit.) 3. Prepare an income statement for Olivian Company for the coming year based on the number of units computed in Requirement 2. 4. What if Olivian had a 35 percent tax rate? Would the units sold to reach a 420,000 target net income be higher or lower than the units calculated in Requirement 3? Calculate the number of units needed at the new tax rate. (Round dollar amounts to the nearest dollar and unit amounts to the nearest unit.)
- Break-Even Sales and Cost-Volume-Profit Chart For the coming year, Cleves Company anticipates a unit selling price of $98, a unit variable cost of $49, and fixed costs of $588,000. Required: 1. Compute the anticipated break-even sales (units). units 2. Compute the sales (units) required to realize a target profit of $259,700. units 3. Construct a cost-volume-profit chart on paper, assuming maximum sales of 24,000 units within the relevant range. From your chart, indicate whether each of the following sales levels would produce a profit, a loss, or break-even. $1,646,400 $1,470,000 $1,176,000 $882,000 $705,600 4. Determine the probable operating income (loss) if sales total 19,200 units. If required, use the minus sign to indicate a loss.Break-Even Sales and Cost-Volume-Profit Chart For the coming year, Cleves Company anticipates a unit selling price of $92, a unit variable cost of $46, and fixed costs of $299,000. Required: 1. Compute the anticipated break-even sales (units). units 2. Compute the sales (units) required to realize a target profit of $138,000. units 3. Construct a cost-volume-profit chart on paper, assuming maximum sales of 13,000 units within the relevant range. From your chart, indicate whether each of the following sales levels would produce a profit, a loss, or break-even. $837,200 Profit $745,200 Profit $598,000 Break-even $450,800 Loss Loss $358,800 4. Determine the probable operating income (loss) if sales total 10,400 units. If required, use the minus sign to indicate a loss. IncomeBreak-Even Sales and Cost-Volume-Profit Chart For the coming year, Cleves Company anticipates a unit selling price of $106, a unit variable cost of $53, and fixed costs of $530,000. Required: 1. Compute the anticipated break-even sales (units). fill in the blank 1 units 2. Compute the sales (units) required to realize a target profit of $227,900. fill in the blank 2 units 3. Construct a cost-volume-profit chart, assuming maximum sales of 20,000 units within the relevant range. From your chart, indicate whether each of the following sales levels would produce a profit, a loss, or break-even. $1,484,000 $1,325,000 $1,060,000 $795,000 $636,000 4. Determine the probable income (loss) from operations if sales total 16,000 units. If required, use the minus sign to indicate a loss. Sfill in the blank
- Break-Even Sales and Cost-Volume-Profit Chart For the coming year, Cleves Company anticipates a unit selling price of $100, a unit variable cost of $60, and fixed costs of $480,000. Required: 1. Compute the anticipated break-even sales (units).fill in the blank 1 units 2. Compute the sales (units) required to realize a target profit of $240,000.fill in the blank 2 units 3. Construct a cost-volume-profit chart, assuming maximum sales of 20,000 units within the relevant range. From your chart, indicate whether each of the following sales levels would produce a profit, a loss, or break-even. $1,200,000 $1,000,000 $800,000 $400,000 $200,000 4. Determine the probable income (loss) from operations if sales total 16,000 units.$fill in the blank 8ебоок Break-even sales and cost-volume-profit chart For the coming year, Cleves Company anticipates a unit selling price of $134, a unit variable cost of $67, and fixed costs of $629,800. Required: 1. Compute the anticipated break-even sales (units). units 2. Compute the sales (units) required to realize a target profit of $341,700. units 3. Construct a cost-volume-profit chart on paper, assuming maximum sales of 18,800 units within the relevant range. From your chart, indicate whether each of following sales levels would produce a profit, a loss, or break-even. $1,768,800 $1,581,200 $1,259,600 $951,400 $750,400 4. Determine the probable operating income (loss) if sales total 15,000 units. If required, use the minus sign to indicate a loss.For the coming year, Cleves Company anticipates a unit selling price of $142, a unit variable cost of $71, and fixed costs of $603,500. Required: 1. Compute the anticipated break-even sales (units).fill in the blank 1 units 2. Compute the sales (units) required to realize a target profit of $298,200.fill in the blank 2 units 3. Construct a cost-volume-profit chart, assuming maximum sales of 17,000 units within the relevant range. From your chart, indicate whether each of the following sales levels would produce a profit, a loss, or break-even. $1,689,800 $1,505,200 $1,207,000 $908,800 $724,200 4. Determine the probable income (loss) from operations if sales total 13,600 units. If required, use the minus sign to indicate a loss.$fill in the blank 8