Jackson Company produces plastic that is used for injection-molding applications such as gears for small motors. In 2016, the first year of operations, Jackson produced 4,000 tons of plastic and sold 3,500 tons. In 2017, the production and sales results were exactly reversed. In each year, the selling price per ton was $2,000, variable manufacturing costs were 15% of the sales price of units produced, variable selling expenses were 10% of the selling price of units sold, fixed manufacturing costs were $2.800.000.
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![Jackson Company produces plastic
that is used for injection-molding
applications such as gears for small
motors. In 2016, the first year of
operations, Jackson produced 4,000
tons of plastic and sold 3,500 tons. In
2017, the production and sales results
were exactly reversed. In each year,
the selling price per ton was $2,000,
variable manufacturing costs were 15%
of the sales price of units produced,
variable selling expenses were 10% of
the selling price of units sold, fixed.
manufacturing costs were $2,800,000,
and fixed administrative expenses
were $500,000.
1) Prepare income statements for EACH
year using variable costing.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbe2c2941-14f4-4d00-86ba-143d83247d0a%2F3e734383-ecae-4fff-9852-44cabf9adc17%2Fqi6u42a_processed.jpeg&w=3840&q=75)
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- In 2012, Grant Co. sold 160,000 units of its product at a selling price of $40. The variable cost per unit was $30, and Grant reported net income for the year of $200,000. What was the amount of Grant's fixed costs for the year?Legrand Company produces hand cream. In 2018, their financial information is as follows:Each jar sells for: $3.40Total variable cost (materials, labor, and overhead) per jar: $2.55Total fixed cost: $58,140Total jars sold in 2018: 81,6001. Calculate the break-even point in units for Legrand?The Robinson Lawn Chair Company produces and sells a single high-priced lawn chair and in fiscal 2016 the company produced and sold 30,000 units. The 2016 income statement of the company reported the following: Sales $1,800,000 Variable Costs $1,350,000 Fixed Costs $240,000 Income before Taxes $210,000 (a) Compute the contribution margin per unit. (b) How many units must be sold to break even? (c) Compute the new breakeven point if the price of unit is increased to $65 and additional $102,000 per year will be paid for advertising. (d) Assuming a tax rate of 25%, how many units must be sold to gain an after tax profit of $200,000
- ABC Limited started its operation in the year 2013 with a total production capacity of 2,00,000 units. The following information, for two years, are made available to you: 2013 , 2014 Sales (units) 80,000 1,20,000 Total Cost 34,40,000 45,60,000 There has been no change in the cost structure and selling price and it is anticipated that it will remain unchanged in the year 2015 also. Selling price is 40 per unit. Calculate : Variable cost per Profit VolumeIn 19A, Starborne Inc. produces a machine for $675 and sells for $1,000. Cost of goods sold comprises of 35% of material, 40% of labour and remaining FOH. During this year, 1000 units have been sold. It is expected that next year, cost of material and labour will go up by 20% and 30% respectively. In order to be competitive, company is increasing the sale price per unit only by 10%, due to which it is expected to increase in volume by 15% also. You are required to prepare forecasted Income statement for 19B, if the prime cost is 60% of cost of goods sold.Sanchez & Ryan, Inc, sells a single product. This year, 20,000 units were sold resulting in $130,000 of sales revenue, $60,000 of variable costs, and $17,500 of fixed costs. If sales increase by $19,500 in a year, profits will increase by:
- TinRoof, Inc., manufactures and sells a do-it- yourself storage shed kit. In 2016, it reported the following: Units produced and sold 3,200 I Investment $2,400,00O I Markup percentage on full cost 8% ' Rate of return on investment 12% | Variable cost per unit $500 Required 1. What was TinRoof's operating income in 2016? What was the full cost per unit? What was the selling price? What was the percentage markup on variable cost? 2. TinRoof is considering increasing the annual spending on advertising by $175,000. The managers believe that the investment will translate into a 10% increase in unit sales. Should the company make the investment? Show your calculations.KidsPlay, Inc., manufactures and sells table sets. In 2016, it reported the following: Units Produced and sold 3,000 Operating income per unit ($450,000 ¸ 3,000) $150 Selling price ($1,500 + $150) $1,650 Full cost per unit (150 ÷ 0.10) $1,500 Variable Costs per unit $600 Markup percentage on variable cost ($1,050 ¸ $600) 175% KidsPlay is considering increasing the annual spending on advertising by $200,000. The managers believe that the investment will translate into a 10% increase in unit sales. Should the company make the investment? What is the change in operation income? Group of answer choices a) Yes, $45,000 b) Yes, $115,000 c) Yes,…ABC Limited started its operation in the year 2013 with a total production capacity of 2,00,000units. The following information, for two years, are made available to you: Year Year 2013 2014 Sales (units) 80,000 1,20,000 Total Cost (') 34,40,000 45,60,000 There has been no change in the cost structure and selling price and it is anticipated that itwill remain unchanged in the year 2015 also. Selling price is `40 per unit. Calculate : () Variable cost per unit. (i) Profit Volume Ratio. (i) Break-Even Point (in units)
- The Derby Shoe Company produces its famous shoe, the Divine Loafer, that sells for $70 per pair. Operating income for 2017 is as follows: Sales revenue ($70 per pair) $350,000 Variable cost ($30 per pair) 150,000 Contribution margin 200,000 Fixed cost 100,000 Operating income $100,000 Derby Shoe Company would like to increase its profitability over the next year by at least 25%. Q.Replace a portion of its variable labor with an automated machining process. This would result in a 20% decrease in variable cost per unit but a 15% increase in fixed costs. Sales would remain the same. Q2. Spend $25,000 on a new advertising campaign, which would increase sales by 10%. Evaluate each of the alternatives considered by Derby Shoes. Do any of the options meet or exceed Derby’s targeted increase in income of 25%? What should Derby do?Sunshine Company’s single product has a selling price of P25 per unit. Last year the company reported a profit of P20,000 and variable expenses totaling P180,000. The product has a 40% contribution ratio. Because of competition, Sunshine Company will be forced in the current year to reduce its selling price by P2 per unit. How many units must be sold in the current year to earn the same profit as was earned last year? (Hint: Prepare last year’s income statement, then, prepare the current year using the new price) 15,000 units 12,000 units 16,500 units 12,960 units Group of answer choices 1 2 3 4CollegePak Company produced and sold 60,000 backpacks during the year just ended at an average price of $20 per unit. Variable manufacturing costs were $8 per unit, and variable marketing costs were $4 per unit sold. Fixed costs amounted to $180,000 for manufacturing and $72,000 for marketing. There was no year-end work-in-process inventory. (Ignore income taxes.) Required: Compute CollegePak`s break-even point in sales dollars for the year. Compute the number of sales units required to earn a net income of $180,000 during the year. CollegePak`s variable manufacturing costs bare expected to increase by 10 percent, compute the selling price that would yield the same contribution-margin ratio in the coming year. If CollegePak`s variable manufacturing costs do increase by 10 percent, compute the selling price that would yield the same contribution-margin ratio in the coming year.
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