TLK Ltd. manufactures small size fans to be used in load shedding areas. Each fan has a rechargeable battery and a built in charging circuit. TLK sells a fan for $120. The annual sale is 30,000 fans. Variable and fixed cost data is given below: Variable expenses                                $84 per fan Fixed expenses                                     $900,000 per year Required: Prepare contribution margin income statement and compute the degree of operating leverage. Next year the sales are expected to increase by 7,500 fans. Compute (a) the expected percentage increase in net operating income (b) expected increase in net operating income and (c) expected total net operating income for the next year.

Sk8 Company produces skateboards and purchases 20,000 units of a wheel bearing each year at a cost of $1 per unit. Sk8 requires a 15% annual rate of return on investment. In addition, the relevant carrying cost (for insurance, materials handling, breakage, etc.) is $0.17 per unit per year. The relevant ordering cost per purchase order is $38.40. Q. Assume that demand is uniform throughout the year and known with certainty so there is no need for safety stocks. The purchase-order lead time is half a month. Calculate Sk8’s reorder point for the wheel bearing.

ProLight plans to sell 1,600 white lights that enhance indoor plant growth next year with total budgeted sales of $48,000 and estimated profit of $8,000. Variable costs are projected to be $18.00 per unit. Customer A offers to pay $10,200 to buy 500 lights from ProLight. Total fixed costs are $12,000 per year. This offer does not affect ProLight’s other planned operations. How much is incremental profit associated with the offer from Customer A?       $1,200     $10,200     $3,200     $7,000     $3,000

Head-First Company plans to sell 4,200 bicycle helmets at $67 each in the coming year. Variable cost is 66% of the sales price; contribution margin is 34% of the sales price. Total fixed cost equals $42,585 (includes fixed factory overhead and fixed selling and administrative expense).   Required: 1. Calculate the sales revenue that Head-First must make to break even by using the break-even point in sales equation. 2. Check your answer by preparing a contribution margin income statement based on the break-even point in sales dollars.

Memex Corp. manufactures memory expansion boards for microcomputers. The average selling price of its finished product is $240 per unit. The average variable cost per unit is $160. Memex incurs fixed costs of $1,920,000 per year. c-1. What will be the company's profit or loss at 26,000 units of sales for a year? (Click to select) is $ c-2. What will be the company's profit or loss at 23,500 units of sales for a year? (Input the value as positive number.) ✓ (Click to select) $ Profit Loss

Braile Gear Works sells a single gear for a price of $73.00 per unit. The variable costs of the gear are $41.00 per gear and annual fixed costs are $548,800. Required: a. What is the break-even level of annual sales for Braile Gear Works? b. The cost analyst tells you that, based on the price and cost information of the gear and the marketing department's sales projection for next year, the margin of safety percentage is 30 percent. How many units does marketing expect to sell next year? Note: Do not round intermediate calculations. Break-even level Number of units to be sold parts

Lush Lawn, Incorporated produces and sells electric lawn trimmers for $150 each. The variable costs of each mower total $110 while total monthly fixed costs are $6,240. Current monthly sales are $51,000. The company is considering a proposal that will decrease the selling price by 10%, increase monthly fixed costs by 50%, and increase unit sales to 500 units per month. Required: a. Compute the company's current break-even point in units and dollars. b. What is the company's current margin of safety in units, dollars, and percentage? a. Break-even point a. Break-even sales b. Margin of safety b. Margin of safety in dollars b. Margin of safety in ratio units unit %

The Bremer Co. manufactures cordless telephones Bremer is planning to implement a JIT production system, which requires annual tooling costs of $150,000. Bremer estimates that the following annual benefits would arise from JIT production.   a. Average inventory will decline by $700,000 from $900,000 to $200,00 b. Insurance, space, materials handling, and setup costs, which currently total $200,00 would decline by 30% c. The emphasis on quality inherent in JIT system would reduce rework costs by 20% Bremer currently incurs $350,000 on rework. d. Better quality would eneble Bremer to raise the prices of its products by $3 per unit. Bremer sells $30,000 unit each year. Bremer required rate of return on inventory investment is 12% per year   Required: Calculate the net benefit or cost to the Bremer Corporation From implementing a JIT production system.

Sandy Bank, Incorporated, makes one model of wooden canoe. Partial information is given below. Required: 1. Complete the following table. 2. Suppose Sandy Bank sells its canoes for $560 each. Calculate the contribution margin per canoe and the contribution margin ratio. 3. This year Sandy Bank expects to sell 760 canoes for $560 each. Prepare a contribution margin income statement for the company. 4. Calculate Sandy Bank's break-even point in units and in sales dollars. Sandy Bank sells its canoes for $560 each. 5. Suppose Sandy Bank wants to earn $72,000 profit this year. Calculate the number of canoes that must be sold to achieve this target. Sandy Bank sells its canoes for $560 each. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the following table. Note: Round your "Cost per Unit" answers to 2 decimal places. Number of Canoes Produced and Sold Total costs Variable Costs Fixed Costs Total Costs Cost per Unit Required 3 Required 4…

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