Solution Question: AccountingA company has provided the following data:SalesSales priceVariable costFixed cost4,000 units$80 per unit$50 per unit$30,000If the dollar contribution margin per unit is increased by 10 percent,total fixed cost is decreased by 15 percent, and all other factorsremain the same, will net operating income increase or decrease?By how much?

Explanation of Sales: Sales refer to the total number of units or goods a company sells within a…

Answered: Question: Accounting A company has…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 2BE: Contribution margin Waite Company sells 250,000 units at 120 per unit. Variable costs are 78 per...

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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?
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?
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.
Contribution margin Waite Company sells 250,000 units at 120 per unit. Variable costs are 78 per unit, and fixed costs are 8,175,000. Determine (a) the contribution margin ratio, (b) the unit contribution margin, and (c) operating income.
provide the answer pls.
Skeeter Systems uses the following data in its Cost-Volume-Profit analyses: Sales Variable expenses Contribution margin Fixed expenses Net operating income O $80,000 What is total contribution margin if sales volume increases by 20%? O $158,400 O $200,000 Total $ 400,000 280,000 120,000 100,000 O $144,000 $ 20,000
A company has provided the following data: Sales 4,000 units Sales price $80 per unit Variable cost $50 per unit Fixed cost $ 30,000 If the dollar contribution margin per unit is increased by 10 percent, total fixed cost is decreased by 15 percent, and all other factors remain the same, will net operating income increase or decrease? By how much?
Matamad Inc. Provides you with the following data on its operation for analysis:Unit selling priceP40Variable costs and expenses per unit.P30Fixed cost and expenses per annum.P48,000REQUIRED:a. Contribution margin per unitb. Contribution margin percentagec. BEP sales volume (units)d. BEP peso salese. Peso sales with desired income of P9,000f. Peso sales with desired income P13,000 after 32% income tax
PE 1. Use the following economic data to answer the numbered questions: Total fixed costs P1.8M Unit selling price P80.00 Unit variable cost P56.00 Indicate the effect on the following by one unit increase in sales volume: 1. Breakeven units Total peso sales 3. Total contribution margin 4. Operating profit 5. Total costs 2.
be determined using the above information Mazoon Company has information on its revenue and costs is as follows: Selling price per unit $125; Variable costs per unit includes: Direct material $15, Direct manufacturing labor $10, Manufacturing overhead $5, and Selling costs $10; Annual fixed costs $78,000. What is the contribution margin percentage? O a. None of the given answers O b. 68% O c. 70% d. 32% e. 60% NEXT PAGE AGEVindows but Jail ENG G 4)
The following information is extracted from the income statement of Al Shams Private Ltd. The Price (P) per unit of product is OMR 12 and Variable cost (VC) per unit is OMR 7 and fixed operating cost is OMR 8,000.Answer the following question after analyzing the given table. YEAR 1 YEAR 2 Sales (in units) 5,000 9,500 Sales Revenue (in OMR) ? ? Less: Variable operating costs ? ? Less: Fixed operating costs 8,000 ? Earnings before interest and taxes (EBIT) ? ? Complete the table Calculate the Degree of Operating Leverage (DOL). Interpret your answer (DOL).
Answer the following questions based on the given information: Sales Units 500,000 Total Sales $50,000,000 Total Variable Cost $35,000,000 Total Fixed Cost $10,000,000 What is Total Contribution Margin? What is Contribution Margin Per Unit? What is the Contribution Margin Ratio?

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