Sinbad manufactures decorative iron railings. In preparing for next year's operations, management has developed the following estimates: (LO# 3) Units Total Per unit Sales 20,000 1,000,000 50 Variable Expenses 600,000 30 СМ 400,000 20 Total Fixed Expenses 110,000 Operating Profit 290,000 Required: EXCEL Compute the following items: a. Unit contribution margin. b. Contribution margin ratio. c. Break-even in units and dollar sales. d. Margin of safety in dollar amount and percentage. e. If the sales volume increases by 20% with no change in total fixed expenses, what will be the change in net operating income? Verify your answer f. If the per unit variable production costs increase by 15%, and if fixed selling and administrative expenses increase by 12%, what will be the new break-even point in dollar sales? g. if the company would like to achieve a profit of $90,000 next year, what would be the break-even point in units and dollar amount to earn that target? h. If monthly sales increase by $80,000 and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?

Sinbad manufactures decorative iron railings. In preparing for next year's operations, management has developed the following estimates: (LO# 3) Units Total Per unit Sales 20,000 1,000,000 50 Variable Expenses 600,000 30 СМ 400,000 20 Total Fixed Expenses 110,000 Operating Profit 290,000 Required: EXCEL Compute the following items: a. Unit contribution margin. b. Contribution margin ratio. c. Break-even in units and dollar sales. d. Margin of safety in dollar amount and percentage. e. If the sales volume increases by 20% with no change in total fixed expenses, what will be the change in net operating income? Verify your answer f. If the per unit variable production costs increase by 15%, and if fixed selling and administrative expenses increase by 12%, what will be the new break-even point in dollar sales? g. if the company would like to achieve a profit of $90,000 next year, what would be the break-even point in units and dollar amount to earn that target? h. If monthly sales increase by $80,000 and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?

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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