Homework Help is Here – Start Your Trial Now!
Business
Accounting
QUESTION 3. Sport Caps Co. manufactures and sells caps for different sporting events. The fixed costs of operating the company are Sl50,000 per month, and the variable costs for caps are $5 per unit. The caps are sold for $8 per unit. The fixed costs provide a production capacity of up to 100,000 caps per month. Required (1) Use the formulas in the chapter to compute the following: a. Contribution margin per cap. b. Break-even point in terms of the number of caps produced and sold. c. Amount of net income at 85,000 caps sold per month (ignore taxes). d. Amount of net income at 30,000 caps sold per month (ignore taxes). (2) Use the fornmulas in the chapter to compute the a. Contribution margin ratio. b. Break-even point in terms of sales dollars. c. Dollars of sales needed to provide $45,000 of profit. d. Amount of net income at S600,000 of sales per month (ignore taxes).

QUESTION 3. Sport Caps Co. manufactures and sells caps for different sporting events. The fixed costs of operating the company are Sl50,000 per month, and the variable costs for caps are $5 per unit. The caps are sold for $8 per unit. The fixed costs provide a production capacity of up to 100,000 caps per month. Required (1) Use the formulas in the chapter to compute the following: a. Contribution margin per cap. b. Break-even point in terms of the number of caps produced and sold. c. Amount of net income at 85,000 caps sold per month (ignore taxes). d. Amount of net income at 30,000 caps sold per month (ignore taxes). (2) Use the fornmulas in the chapter to compute the a. Contribution margin ratio. b. Break-even point in terms of sales dollars. c. Dollars of sales needed to provide $45,000 of profit. d. Amount of net income at S600,000 of sales per month (ignore taxes).

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
Please help me do excercise 3
evnx 10. Wages o lactory superrvisors QUESTION 3. Sport Caps Co. manufactures and sells caps for different sporting events. The fixed costs of operating the company are $150,000 per month, and the variable costs for caps are $5 per unit. The caps are sold for $8 per unit. The fixed costs provide a production capacity of up to 100,000 caps per month. Required (1) Use the formulas in the chapter to compute the following: a. Contribution margin per cap. b. Break-even point in terms of the number of caps produced and sold. c. Amount of net income at 85,000 caps sold per month (ignore taxes). d. Amount of net income at 30,000 caps sold per month (ignore taxes). (2) Use the forrmulas in the chapter to compute the a. Contribution margin ratio. b. Break-even point in terms of sales dollars. c. Dollars of sales needed to provide $45,000 of profit. d. Amount of net income at $600,000 of sales per month (ignore taxes). QUESTION 4. Company A is a manufacturer with current sales of $3,000,000 and a 60% contribution margin. Its fixed costs equal S1,300,000. Company B is a consulting firm with current service revenues of S3,000,000 and a 25% contribution margin. Its fixed costs equal $250,000. 144 1OF 4 IOO 635 PM 11/2/
Transcribed Image Text:evnx 10. Wages o lactory superrvisors QUESTION 3. Sport Caps Co. manufactures and sells caps for different sporting events. The fixed costs of operating the company are $150,000 per month, and the variable costs for caps are $5 per unit. The caps are sold for $8 per unit. The fixed costs provide a production capacity of up to 100,000 caps per month. Required (1) Use the formulas in the chapter to compute the following: a. Contribution margin per cap. b. Break-even point in terms of the number of caps produced and sold. c. Amount of net income at 85,000 caps sold per month (ignore taxes). d. Amount of net income at 30,000 caps sold per month (ignore taxes). (2) Use the forrmulas in the chapter to compute the a. Contribution margin ratio. b. Break-even point in terms of sales dollars. c. Dollars of sales needed to provide $45,000 of profit. d. Amount of net income at $600,000 of sales per month (ignore taxes). QUESTION 4. Company A is a manufacturer with current sales of $3,000,000 and a 60% contribution margin. Its fixed costs equal S1,300,000. Company B is a consulting firm with current service revenues of S3,000,000 and a 25% contribution margin. Its fixed costs equal $250,000. 144 1OF 4 IOO 635 PM 11/2/
Expert Solution
steps

Step by step

Solved in 3 steps with 5 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Determination of Tax Liability
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS