FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- Haresharrow_forwardThe Mariachi Company prepared the following contribution format income statement based on a sales volume of 1,200 units (the relevant range of production is 500 units to 2,000 units): Sales 26,400Variable expenses 18,000Contribution margin 8,400Fixed expenses 6,200Net operating income 2,200 What is the break-even point in dollar sales?arrow_forwardIf the net operating income is $10,000, the gross margin is $40,000, and the cost of goods sold is $49,500, then the sales must be: Multiple Choice $99,500. $129,000. $89,500. $139,000.arrow_forward
- Stonebraker Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range. Sales (9,300 units) Variable expenses Contribution margin Fixed expenses Net operating income $ 306,900 204,600 102,300 77,500 $ 24,800 Required: a. If sales increase to 9,370 units, what would be the estimated increase in net operating income? b. If the variable cost per unit increases by $7, spending on advertising increases by $3,500, and unit sales increase by 20,500 units, what would be the estimated net operating income? c. Estimate how many units must be sold to achieve a target profit of $36,460.arrow_forwardPart 1. Calculate the return on investment (ROI) and residual income (RI) for each division of Carni Trin, and briefly explain which manager will get the bonus. 2. Similar to RI another measure called economic value added (EVA) was brought to the attention of the general manager. The general manager requests that the accountant calculate EVA adjusted incomes of clothing and cosmetics, and finds that the adjusted after-tax operating incomes are $760,000 and $1,460,000, respectively. Also, the clothing division has $500,000 of current liabilities, while the cosmetics division has only $300,000 of current liabilities. Using the preceding information, calculate EVA, and discuss which division manager will get the bonus. - 3. What nonfinancial measures could CarniTrin use to evaluate divisional performances? Part Barrow_forwardJamison Company uses the total cost method of applying the cost-plus approach to product pricing. Jamison produces and sells Product X at a total cost of $800 per unit, of which $540 is product cost and $260 is selling and administrative expenses. In addition, the total cost of $800 is made up of $460 variable cost and $340 fixed cost. The desired profit is $168 per unit. Determine the markup percentage on total cost. %arrow_forward
- Can i please get help withthis question? Dannica Corporation produces products that it sells for $40 each. Variable costs per unit are $25, and annual fixed costs are $360,000. Dannica desires to earn a profit of $150,000. Required Use the equation method to determine the break-even point in units and dollars. Determine the sales volume in units and dollars required to earn the desired profit.arrow_forwardMaestro Co. employs a salesperson whose salary is $2,000 per month. Once the monthly sales exceed $40,000, the salesperson receives the commission of 5% of the sales made. Which of the following Cost Behavior Patterns describe the salesperson’s salary the most? Question 7Select one: a. Variable costs b. Fixed costs c. Semivariable costs d. Step costsarrow_forwardSunn Company manufactures a single product that sells for $120 per unit and whose variable costs are $90 per unit. The company's annual fixed costs are $432.000 Management targets an annual income of $750,000. (1) Compute the unit sales to earn the target income. Numerator: 1 Denominator: (2) Compute the dollar sales to earn the target income.. Numerator: Denominator P M = Units to Achieve Target Units to achieve target Dollars to Achieve Target Dollars to achieve targetarrow_forward
- Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below: Sales Variable expenses Contribution margin Fixed expenses Net operating income Claimjumper $57,600 38,400 $ 19, 200 Required: 1. What is the overall contribution margin (CM) ratio for the company? 2. What is the company's overall break-even point in dollar sales? 3. Prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of sales for the two products. Required 1 Required 2 Required 3 Complete this question by entering your answers in the tabs below. Sales Variable expenses Contribution margin Prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of sales for the two products. (Do not round intermediate calculations. Round your answers to the nearest dollar amount.) Engberg Company Contribution Income…arrow_forwardparesharrow_forward= Adam's Repair Shop has a monthly target operating income of $12,500. Variable expenses are 75% of sales, and monthly fixed expenses are $9,500. Hint: The contribution margin ratio= 100% - Variable expenses percentage of sales. Read the requirements. Requirement 1. Compute the monthly margin of safety in dollars if the shop achieves its income goal. Begin by identifying the formula to compute the margin of safety. = Margin of safety in dollars (Round intermediate calculations up to the nearest whole dollar and your final answer to the nearest whole dollar.) The margin of safety is Requirement 2. Express Adam's margin of safety as a percentage of target sales. Begin by identifying the formula to compute the margin of safety as a percentage of target sales. (Round the percentage to the nearest whole percent.) The margin of safety percentage is % of target sales. Requirement 3. What is Adam's operating leverage factor at the target level of operating income? Begin by identifying the…arrow_forward
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