The Food division of Garcia Company reports the following for the current year. Sales Cost of goods sold Gross profit Expenses Income $4,000,000 2,800,000 1,200,000 1,000,000 $ 200,000 Garcia wants to achieve at least a 10% profit margin next year. Two alternative strategies are proposed. Strategy 1: Increase advertising expenses by $225,000. The company expects this to increase sales by $600,000. Cost of goods sold will not change. Strategy 2: Develop a more efficient manufacturing process. This will decrease cost of goods sold by $140,000. a. For each strategy, compute the profit margin expected for next year. b. Which strategy should Garcia choose based on expected profit margin? Complete this question by entering your answers in the tabs below. Required 1 Required 2 For each strategy, compute the profit margin expected for next year. Note: Round your answers to one decimal place. Strategy 1 Strategy 2 Profit margin Required 2 >

Wildhorse's managers have determined that variable costs per unit will increase by 16% beginning next month. To offset this increase in costs, they are considering a 10% increase in the sales price. Market research indicates that the price increase will result in a 2% decrease in the number of learning systems Wildhorse sells. What will be Wildhorse's expected operating income if the price increase is implemented? (Round per unit calculations to 2 decimal places e.g. 52.75 and final answer to O decimal places, eg. 5,275.) Operating income %24

Ore Company produces bookcases. Sales were good in 2019. However, with the slowdown in the economy, the Chief Financial Officer is concerned about the sales for 2020. The income statement for 2020 is as follows: Sales revenue $600,000 Less: Variable costs $360,000 Contribution margin $240,000 Less: Fixed costs $140,000 Net profit $100,000 The company expects to sell 60,000 units in 2020. Compare different types of cost behaviours to do the following: (a) Use cost-volume-profit analysis to determine the breakeven point in units and in dollars. (b) Use cost-volume-profit analysis to determine the margin of safety in units and in dollars. (c) Assuming that cost behaviour pattern remains unchanged, compute the decrease in net income if sales revenue dropped by $200,000 in 2020.

Berring Company produces two products: the deluxe and the standard. The deluxe sells for $40, and the standard sells for $10. Projected sales of the two models for the coming four quarters are given below.   Deluxe Standard First quarter 12,000     90,000     Second quarter 14,200     88,600     Third quarter 16,800     93,000     Fourth quarter 20,000     91,400     The president of the company believes that the projected sales are realistic and can be achieved by the company. In the factory, the production supervisor has received the projected sales figures and gathered information needed to compile production budgets. He found that 1,300 deluxes and 1,170 standards were in inventory on January 1. Company policy dictates that ending inventory should equal 20 percent of the next quarter’s sales for deluxes and 10 percent of next quarter’s sales for standards. Required: Question Content Area 1. Prepare a sales budget for each quarter and for the year in total. Show…

What is the level of sales needed to obtain a 15% ROI of $8,250,000 for a restaurant and cover all the costs? (Condition: the restaurant has two main products, food and beverage) Food generates 75% of total sales and $3,000,000 in food sales with a 34% food cost. Beverage with a CMR of .80. Tax rate is 18% and fixed costs are $500,000 annually.

A new restaurant is ready to open for business. It is estimated that the food cost (variable cost) will be 64.46% of sales, while fixed cost will be $450,000. The first year’s sales estimates are $1,285,245. Calculate the firm’s operating breakeven level of sales.

3) A shoe retailer plans, for the period, net sales of $3,000,000 with a 20% profit and 25% operating expenses. The anticipated markdowns are 15%, along with sales discounts at 2% and shortages of 3%. Cash discounts to be earned are estimated at 5%, and alterations are 1% of net sales. What initial markup % is needed for this retailer's merchandise to achieve the desired profit goal?

Bear Paints is a national paint manufacturer and retailer. (Click the icon to view additional information.) Assume that management has specified a 20% target rate of return. Read the requirements. Requirement 1. Calculate each division's ROI. First enter the formula, then calculate the ROI for each division. (Enter the ROI as a percent rounded to the nearest hundredth of a percentage, X.XX%.) Paint Stores Paint Stores Consumer Requirement 2. Calculate each division's sales margin. Interpret your results. Enter the formula, then calculate the sales margin for each division. (Enter the sales margin as a percent rounded to the nearest hundredth of a percentage, X.XX%.) Sales margin Consumer Interpret your results. The Paint Stores Consumer + The Paint Stores + Consumer + Division is more profitable on each dollar of sales. Requirement 3. Calculate each division's capital turnover. Interpret your results. First enter the formula, then calculate the capital turnover for each division.…