Lannion and Co. Is engaged in providing and marketing a standard advice service. Summarized results for the past two months reveal the following: Sales (units of the service) Sales revenue (€) Operating profit (€) October November 200 300 5.000 7.500 1.000 2.200 There were no price changes of any description during these two months. Required: a) Deduce the BEP (in units of the service) for Lannion and Co. b) State why the business might find it useful to know its BEP.
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- Using the information in the previous exercises about Marleys Manufacturing, determine the operating income for department B, assuming department A sold department B 1,000 units during the month and department A reduces the selling price to the market price.Bradshaw Company reported sales of 5,000,000 in 20X1. At the end of the fiscal year (June 30, 20X1), the following quality costs were reported: Required: 1. Prepare a quality cost report. 2. Prepare a graph (pie chart or bar graph) that shows the relative distribution of quality costs, and comment on the distribution. 3. Assuming sales of 5,000,000, by how much would profits increase if quality improves so that quality costs are only 3% of sales?The following Income statement was drawn from the records of Walton Company, a merchandising firm: sales revenue (7,500 units x $163) Cost of goods sold (7,500 units × $81) Gross margin Sales commissions (10% of sales) Administrative salaries expense Required Advertising expense Depreciation expense Shipping and handling expenses (7,500 units x $3) Net income For the Year Ended December 31, Year 1 WALTON COMPANY Income statement Req A a. Reconstruct the income statement using the contribution margin format. b. Calculate the magnitude of operating leverage. c. Use the measure of operating leverage to determine the amount of net Income Walton will earn If sales increase by 10 percent. Complete this question by entering your answers in the tabs below. Req B and C Less: Fixed costs Less: Variable costs Reconstruct the income statement using the contribution margin format. WALTON COMPANY Income Statement For the Year Ended December 31, Year 1 S $1,222,500 (607,500) 615,000 (122,250)…
- Net sales for the year were $450,000 and cost of goods sold was $297,000 for the company's existing products. A new product is presently under development and has an expected selling price of not more than $75 per unit in order to remain competitive with similar products in the marketplace. Required: a. Calculate gross profit and the gross profit ratio for the year. Net sales Cost of goods sold Gross profit $ 450,000 $ 153,000 b. What is the maximum cost per unit that can be incurred to manufacture the new product so that the product can be priced competitively and will not result in a reduction to the company's gross profit ratio? (Round your final answer to 2 decimal places.) Maximum manufacturing cost per unitJordan Cameras, Incorporated manufactures two models of cameras. Model ZM has a zoom lens; Model DS has a fixed lens. Jordan uses an activity-based costing system. The following are the relevant cost data for the previous month: Direct Cost per Unit Direct materials Direct labor Category Unit level Batch level Product level Facility level Total Estimated Cost $ 25,960 49,920 90,000 180,000 $ 345,880 Model ZM $ 20.70 29.40 Cost Driver Model DS $7.00 9.00 Number of units Number of setups Number of TV commercials Number of machine hours Amount of Cost Driver ZM: 2,500 units; DS: 9,300 units ZM: 26 setups; DS: 26 setups ZM: 14; DS: 11 ZM: 300 hours; DS: 600 hours Jordan's facility has the capacity to operate 2,700 machine hours per month. Required a. Compute the cost per unit for each product. b. The current market price for products comparable to Model ZM is $118 and for DS is $68. If Jordan sold all of its products at the market prices, what was its profit or loss for the previous month?…Apply mathematical skills around cost structures and appropriate equations to answer the following, inclusive of all associated workings to maximise marks: Opening Inventory + Purchases – Closing Inventory = Cost of Sales (CoS).Gbholan Co made sales of $1,930,200 during the year ended 31st March X4. Inventory decreased by $132,000 over the year and all sales were made at a mark-up of 25%.What was the cost of purchases during the year, to the nearest $100?
- The Officers of the Company reviewed the profitability of the company's four products and the potential effect of several proposals for varying the product mix. An excerpt from the year's income statement and other date follows: Total P Q R S Sales P62,600 P10,000 P18,000 P12,600 P22,000 Cost of Goods Sold 44,274 4,750 7,056 13,968 18,500 Gross Profit P18,326 P5,250 P10,944 P(1,368) P3,500 Operating Expense 12,012 1,990 2,976 2,826 4,220 Profit before income tax P6,314 P3,260 P7,968 P(4,194) P(720) Units Sold 1,000 1,200 1,800 2,000 Sales Price Per Unit P10.00 P15.00 P7.00 P11.00 Variable Cost of goods sold per unit P2.50 P3.00 P6.50 P6.00 Variable operating expense per unit P1.17 P1.25 P1.00 P1.20 The total fixed cost is not expected to fluctuate as a result of changes under consideration. Required:…On June 30, N, considering the customer's purchasing pace, the entity deduces that the customer will indeed reach the target of 75 units. April: 10 units May: 12 units June: 10 units Work to be done: How do these new orders change the assumptions that the entity made when recognizing revenue in the first quarter? Calculate the adjustment to the amount of revenue that the entity will have to recognize on the first quarter revenue Calculate the 2nd quarter revenue based on the new assumptions.or each of the separate revenue contract scenarios 1 through 5, (a) measure the transaction price and (b) determine whether the transaction price is fixed, variable, or some combination of both. 1. Loyola Inc. sells $70,000 of inventory during the year to customers for $140,000. Loyola Inc. accepts returns up to 3 months after the date of purchase. Loyola estimates returns to be 6% of sales. a. Transaction price Answer b. Variable consideration Answer Fixed consideration Answer 2. Nakoma Corp. sells product offering a retroactive volume discount on certain cumulative sales volumes as follows: 0 to 500 units cost $10 each; 501 to 1,000 units cost $9 each; 1,001 units and beyond cost $8 each. For Nakoma’s largest customer, Nakoma estimates the likelihood of cumulative purchases for the year as follows: 15% for 400 units, 50% for 800 units, and 35% for 1,200 units. The revenue contract stipulates that the price per unit of product will be adjusted retroactively once…
- The following Income statement was drawn from the records of Campbell Company, a merchandising firm: CAMPBELL COMPANY Income Statement For the Year Ended December 31, Year 1 Sales revenue (7,000 units × $165) Cost of goods sold (7,000 units x $87) Gross margin Sales commissions (10% of sales) Administrative salaries expense Advertising expense Depreciation expense Shipping and handling expenses (7,000 units × $2) Net income Required Req A a. Reconstruct the income statement using the contribution margin format. b. Calculate the magnitude of operating leverage. c. Use the measure of operating leverage to determine the amount of net Income Campbell will earn if sales Increase by 20 percent. Complete this question by entering your answers in the tabs below. Req B and C Less: Variable costs Less: Fixed costs Reconstruct the income statement using the contribution margin format. CAMPBELL COMPANY Income Statement For the Year Ended December 31, Year 1 $ $1,155,000 (609,000) 546,000 (115,500)…MN Plc's draft statement of profit or loss for the year ended 31 March 20X8 includes GHS8m of revenue for credit sales made on a 'sale or return' basis. At 31 March 20X8 customers who had not yet paid had the right to return goods to the value of GHS2.6m. MN Plc applied a mark-up on cost of 30% on all of these sales. MN Plc's customers have in the past returned goods under this type of agreement. By what amount should MN Plc's profit for the year ended 31 March 20X8 be reduced in respect of this? A. GHS2,600,000 B. GHS780,000 C. GHS600,000 D. GHS2,400,000Assume that in September, Joplin Designs customers actually return$150,000 of inventory. Using the same cost of goods sold percentage, the companywould make the following entries to record 1) the refunds and 2) cost of items returned.