Sandhill Electrical Products serves both residential and commercial clients. Annual financial information for Sandhill is as follows:CommercialResidentialTotalSales Revenues$808,000$508,000 $1,316,000Variable Costs202,000127,000329,000Contribution Margin$606,000$381,000987,000Fixed Costs292,500Operating Profit$694,500Calculate the break-even point in sales revenue dollars for Sandhill Electrical Products.Break-even point in sales revenue$

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Answered: Sandhill Electrical Products serves…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The contribution format income statement for Huerra Company for last year is given below: Total Unit Sales $ 992,000 $ 49.60 Variable expenses 595,200 29.76 Contribution margin 396,800 19.84 Fixed expenses 316,800 15.84 Net operating income 80,000 4.00 Income taxes @ 40% 32,000 1.60 Net income $ 48,000 $ 2.40 The company had average operating assets of $500,000 during the year. Required: 1. Compute the company’s margin, turnover, and return on investment (ROI) for the period. For each of the following questions, indicate whether the margin and turnover will increase, decrease, or remain unchanged as a result of the events described, and then compute the new ROI figure. Consider each question separately, starting in each case from the data used to compute the original ROI in (1) above. 2. Using Lean Production, the company is able to reduce the average level of inventory by $96,000. 3. The company achieves a cost savings of $6,000 per year by using less…
Blanchard Company manufactures a single product that sells for $160 per unit and whose total variable costs are $128 per unit. The company's annual fixed costs are $464,000. (1) Prepare a contribution margin income statement for Blanchard Company showing sales, variable costs, and fixed costs at the break- even point. (2) Assume the company's fixed costs increase by $130,000. What amount of sales (in dollars) is needed to break even? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a contribution margin income statement for Blanchard Company showing sales, variable costs, and fixed costs at the break-even point. BLANCHARD COMPANY Contribution Margin Income Statement (at Break-Even) ces Amount Percentage of sales Required 2 > ***** **** Respired Gaved
Sjostrom Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. Sales (7,000 units) $ 280,000 Variable expenses 182,000 Contribution margin 98,000 Fixed expenses 84,000 Net operating income $ 14,000 If the variable cost per unit increases by $10, spending on advertising increases by $1,500, and unit sales increase by 15,800 units, the net operating income would be closest to: a/ 12,500 b/ 114,100 c/ 91,200 d/ 5,700
Data concerning Wislocki Corporation's single product appear below: Selling price Variable expenses Contribution margin Per Unit Percent of Change in net operating income 25% Fixed expenses are $1,051,000 per month. The company is currently selling 9,700 units per month. Required: The marketing manager would like to introduce sales commissions as an Incentive for the sales staff. The marketing manager has proposed a commission of $11 per unit. In exchange, the sales staff would accept an overall decrease in their salaries of $103,000 per month. The marketing manager predicts that Introducing this sales Incentive would Increase monthly sales by 470 units. What should be the overall effect on the company's monthly net operating Income of this change?
The following annual information is for Dexter Corporation: Product A Revenue per unit: $20.00 Variable cost per unit: $15.00 Total fixed costs: $100,000 How many units does the company have to sell to achieve an after tax income of $75,000 if the income tax rate is 25%?
Whirly Corporation's contribution format income statement for the most recent month is shown below: Total Per Unit Sales (7,700 units) $ 246, 400 $ 32.00 Variable expenses 138, 600 18.00 Contribution margin 107,800 $ 14.00 Fixed expenses 54, 500 Net operating income $ 53,300 Required: (Consider each case independently): What would be the revised net operating income per month if the sales volume increases by 60 units? What would be the revised net operating income per month if the sales volume decreases by 60 units? What would be the revised net operating income per month if the sales volume is 6, 700 units?
Whirly Corporation’s most recent income statement is shown below: Total Per Unit Sales (8,800 units) $ 281,600 $ 32.00 Variable expenses 167,200 19.00 Contribution margin 114,400 $ 13.00 Fixed expenses 54,900 Net operating income $ 59,500 Required: Prepare a new contribution format income statement under each of the following conditions (consider each case independently): 1. The sales volume increases by 80 units. 2. The sales volume decreases by 80 units. 3. The sales volume is 7,800 units.
Last year’s contribution format income statement for Huerra Company is given below: Total Unit Sales $ 1,002,000 $ 50.10 Variable expenses 601,200 30.06 Contribution margin 400,800 20.04 Fixed expenses 316,800 15.84 Net operating income 84,000 4.20 Income taxes @ 40% 33,600 1.68 Net income $ 50,400 $ 2.52 The company had average operating assets of $491,000 during the year. Required: Compute last year’s margin, turnover, and return on investment (ROI). For each of the following questions, indicate whether last year’s margin and turnover will increase, decrease, or remain unchanged as a result of the events described, and then compute the new ROI. Consider each question separately. Using Lean Production, the company is able to reduce the average level of inventory by $100,000. The company achieves a cost savings of $10,000 per year by using less costly materials. The company purchases machinery and equipment that increase average operating assets by $125,000.…
McGrath electric is a service firm with current service sales of 4,794,549 and a 57% contribution margin. It’s fixed costs are 1,217,297. If there is a 13% in sales, compute the percentage of net increase in operating income for McGrath. Round to the nearest hundred, two decimals.
The following CVP income statements are available for Sunland Company and Carla Vista Company: Sunland Company Carla Vista Company Sales revenue $370,000 $370,000 Variable costs 222,000 74,000 Contribution margin 148,000 296,000 Fixed costs 98,000 246,000 Operating income $50,000 $50,000 (a) Calculate the break-even point in dollars and the margin of safety ratio for each company. (Round break-even point to the nearest whole dollar, e.g. 5,275 and margin of safety ratio to 2 decimal places, e.g. 15.25%.) Sunland Company Carla Vista Company Break-even point $ $ Margin of safety ratio de % %
Skywalker Corporation reported the following on their contribution format income statement: Sales (12,000 units) $175,000 Less: Variable expenses 100,000 Contribution margin 75,000 Less: Fixed expenses 62,500 Net operating income $ 12,500 What is the contribution margin ratio?
Owe

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