The following information is available on Crain Co.'s two product line: Sales Variable costs Contribution margin Fixed costs: Avoidable Unavoidable Operating income (loss) Chairs $24,000 $18,000 $28,800 $13,200 $180,000 (96,000) 84,000 (36,000) (18,000) $30,000 Tables $48,000 (30,000) 18000 (12,000) (10,800) ($4,800) Assuming the tables line is discontinued, and the factory space previously used to make tables is rented for $24,000 per year, operating income will increase by what amount?
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- (e) Product Blue Product Red Selling $12.00 $24.00Variable cost $4.00 $8.00Contribution margin $8.00 $16.00Fixed costs apportioned $200,000 $400,00Budgeted Sales Units 140,000 60,000 Calculate the breakeven points, for each product and the company as a whole and comment on your findings f)Discuss the merits and demerits of the cost volume profit analysis (CVP)Required information [The following information applies to the questions displayed below.] Information for Pueblo Company follows: Sales Revenue Less: Total Variable Cost Contribution Margin Product A $ 51,000 $ 11,500 $ 39,500 Target sales Product B $ 68,000 $ 30,150 $ 37,850 Required: The total fixed costs are $30,000. Determine target sales needed to earn a $26,000 target profit. Note: Do not round intermediate calculations. Round your answer to 2 decimal places.8) Ahmet Company has three products, A, B, and C. The following information is available: A B с Sales Variable costs Contribution margin Fixed costs: Avoidable Unavoidable Operating income $70,000 37,000 33,000 10,000 7.000 $16,000 $97,000 51.000 46,000 20,000 12,000 $14.000 $23,000 15,000 8,000 2,000 9.400 $ (3,400) Ahmet Company is thinking of dropping Product C because it is reporting a loss. Assuming Ahmet drops Product C and does NOT replace it, operating income will A) increase by $3,400 B) increase by $2,000 C) decrease by $6,000 D) decrease by $11,400
- Required information [The following information applies to the questions displayed below.] Information for Pueblo Company follows: Sales Revenue Less: Total Variable Cost Contribution Margin Weighted average CM ratio Product A Product B $ 60,000 $ 31,490 $ 28,510 Required: Determine Pueblo's (overall) weighted-average contribution margin ratio. Note: Do not round intermediate calculations. % $ 57,000 $ 11,800 $ 45,200II. George Corporation has the following information for the current year: Selling price per unit Variable costs per unit Fixed costs Required: Prepare a cost-volume-profit graph identifying the following items: Total fixed costs line Total variable costs line Total costs line Total revenues line Breakeven point in sales dollars Breakeven point in units A. B. C. D. E. F. G. H. Dollars (S) Profit area Loss area 6,000 5,000 4,000 3,000 2,000 1,000 S 10.00 6.00 S $1,000.00 0 100 200 300 400 Qty (# Units) 500Revenue Variable costs: Direct labor Direct materials Contribution margin Fixed costs Profit margin $0 O $10,000 ($25,000) ($10,000) product X $50,000 O $50,000 $20,000 $30,000 ? ? ? product Y $80,000 $30,000 $20,000 ? ? ? a total $130,000 The company allocates fixed costs based on direct labor dollars. Compute the profit margin for product line X. $50,000 $50,000 $30,000 $25,000 $5,000
- A company has assessed the profitability of its three products as shown here: Product A Product B Product C Total Sales (units) 3,000 5,000 2,000 10,000 £ £ Price 15.00 10.00 5.00 Variable costs 6.00 4.00 3.00 Divisible fixed costs 2.00 1.00 0.50 Non-divisible fixed costs 2.00 2.00 2.00 Profit/(Loss) 5.00 3.00 (0.50) As a result of this, it has been suggested that Product C should be dropped. All other things being equal what would be the financial impact of dropping Product C? A B Profit would increase by £1,000. Profit would increase by £2,000. Profit would fall by £3,000. C D Profit would fall by £4,000. £Required information [The following information applies to the questions displayed below.] Information for Pueblo Company follows: Sales Revenue Less: Total Variable Cost Contribution Margin Weighted average CM ratio Product A $ 52,000 $ 10,000 $ 42,000 Required: Determine Pueblo's (overall) weighted-average contribution margin ratio. Note: Do not round intermediate calculations. % Product B $ 66,000 $18,320 $ 47,680On the cost-volume-profit graph, the area between the total cost line and the sales line after the break-even point represents: O a. The contribution margin per unit O b. The profit area O c. The variable cost amount O d. The fixed cost amount O e. The loss area US PAGE NEXT PAGE nere to search O W 19:09 A O D a d) ENG 07-04-2021 hp prt sc delete home end & 9 + backspace num lock R T P home D F G H K enter レ pause ↑ shift 11 end alt ctrl
- The following information is for Alex Corp: Product X: Revenue $12.00 Variable Cost $4.50 Product Y: Revenue $44.50 Variable Cost $9.50 Total fixed costs $75,000 What is the breakeven point assuming the sales mix consists of two units of Product X and one unit of Product Y?Rings Company has three product lines, A, B, and C. The following financial information is available: Item Product Line A Product Line B Product Line C Sales $ 66,000 $ 135,000 $ 30,000 Variable costs $ 39,600 $ 72,000 $ 18,750 Contribution margin $ 26,400 $ 63,000 $ 11,250 Fixed costs: Avoidable $ 6,100 $ 18,000 $ 8,400 Unavoidable $ 4,800 $ 13,500 $ 3,800 Pre-tax operating income $ 15,500 $ 31,500 $ (950) If Product Line C is discontinued and the manufacturing space formerly devoted to this line is rented for $6,000 per year, pre-tax operating income for the company will likely: Multiple Choice Be unchanged—the two effects cancel each other out. Increase by $1,950. Increase by $3,150. Increase by $5,850. Increase by some other amount.A company shows you the following data: Sales Costs: Variable costs Fixed costs Total costs Income (loss) Product Data O $20,000 decrease O $30,000 increase O $30,000 decrease O $20,000 increase F Product G Total $300,000 $210,000 $340,000 $850,000 $180,000 $180,000 $220,000 $580,000 50,000 50,000 40,000 140,000 $230,000 $230,000 $260,000 $720,000 $ 70,000 $(20,000) $ 80,000 $130,000 Management is considering the discontinuance of the manufacture and sale of Product G at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Products F and H. How much would net income for the current year change if they discontinue Product G?