Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 16, Problem 18E
Carmichael Corporation is in the process of preparing next year’s budget. The pro forma income statement for the current year is as follows:
Required:
- 1. What is the break-even sales revenue (rounded to the nearest dollar) for Carmichael Corporation for the current year?
- 2. For the coming year, the management of Carmichael Corporation anticipates an 8 percent increase in variable costs and a $60,000 increase in fixed expenses. What is the break-even point in dollars for next year? (CMA adapted)
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Finch Corporation, which has three divisions, is preparing its sales budget. Each division expects a different growth rate
because economic conditions vary in different regions of the country. The growth expectations per quarter are 6
percent for Cummings Division, 4 percent for Springfield Division, and 8 percent for Douglas Division.
Required
a. Complete the sales budget by filling in the missing amounts.
b. Determine the amount of sales revenue that the company will report on its quarterly pro forma income statements.
Complete this question by entering your answers in the tabs below.
Required A Required B
Complete the sales budget by filling in the missing amounts.
Note: Round your final answers to the nearest whole dollar amount.
Division
Cummings Division
Springfield Division
Douglas Division
First
Quarter
$ 170,000
360,000
230,000
Second
Quarter
Third
Quarter
Heathshoe Limited had profits before tax of 873,334 in the current year, which represented 25% of sales for the year. Next year, they are budgeting that sales are expected to increase by 20% and costs will increase by 15%. What is the budgeted profit?
Stuart Corporation, which has three divisions, is preparing its sales budget. Each division expects a different growth rate because
economic conditions vary in different regions of the country. The growth expectations per quarter are 4 percent for Cummings
Division, 2 percent for Springfield Division, and 6 percent for Douglas Division.
Required
a. Complete the sales budget by filling in the missing amounts.
b. Determine the amount of sales revenue that the company will report on its quarterly pro forma income statements.
Complete this question by entering your answers in the tabs below.
Required A Required B
Complete the sales budget by filling in the missing amounts.
Note: Round your final answers to the nearest whole dollar amount.
Division
First
Quarter
Second
Third
Quarter
Quarter
Fourth
Quarter
Cummings Division
$ 100,000
Springfield Division
400,000
Douglas Division
220,000
Chapter 16 Solutions
Cornerstones of Cost Management (Cornerstones Series)
Ch. 16 - Prob. 1DQCh. 16 - Describe the difference between the units-sold...Ch. 16 - Define the term break-even point.Ch. 16 - Explain why contribution margin per unit becomes...Ch. 16 - A restaurant owner who had yet to earn a monthly...Ch. 16 - What is the variable cost ratio? The contribution...Ch. 16 - Prob. 7DQCh. 16 - Suppose a firm with a contribution margin ratio of...Ch. 16 - Prob. 9DQCh. 16 - Explain how CVP analysis developed for single...
Ch. 16 - Prob. 11DQCh. 16 - How do income taxes affect the break-even point...Ch. 16 - Explain how a change in sales mix can change a...Ch. 16 - Explain how a change in sales mix can change a...Ch. 16 - Prob. 15DQCh. 16 - Prob. 1CECh. 16 - Prob. 2CECh. 16 - Health-Temp Company is a placement agency for...Ch. 16 - Olivian Company wants to earn 420,000 in net...Ch. 16 - Vandenberg, Inc., produces and sells two products:...Ch. 16 - Prob. 6CECh. 16 - Prob. 7CECh. 16 - Prob. 8ECh. 16 - Gelbart Company manufactures gas grills. Fixed...Ch. 16 - Schylar Pharmaceuticals, Inc., plans to sell...Ch. 16 - Prob. 11ECh. 16 - Prob. 12ECh. 16 - Big Red Motors, Inc., employs 15 sales personnel...Ch. 16 - Sports-Reps, Inc., represents professional...Ch. 16 - Campbell Company manufactures and sells adjustable...Ch. 16 - Prob. 16ECh. 16 - Sara Pacheco is a sophomore in college and earns a...Ch. 16 - Carmichael Corporation is in the process of...Ch. 16 - Choose the best answer for each of the following...Ch. 16 - Prob. 20ECh. 16 - Income statements for two different companies in...Ch. 16 - Prob. 22ECh. 16 - Prob. 23ECh. 16 - Busy-Bee Baking Company produces a variety of...Ch. 16 - Prob. 25ECh. 16 - Jester Company had unit contribution margin on...Ch. 16 - Loessing Company produced and sold 12,000 units...Ch. 16 - Junior Company has a breakeven point of 34,600...Ch. 16 - Prob. 29ECh. 16 - If a companys variable cost per unit increases,...Ch. 16 - Prob. 31PCh. 16 - More-Power Company has projected sales of 75,000...Ch. 16 - Consider the following information on four...Ch. 16 - Hammond Company runs a driving range and golf...Ch. 16 - Prob. 35PCh. 16 - Faldo Company produces a single product. The...Ch. 16 - Katayama Company produces a variety of products....Ch. 16 - Prob. 38PCh. 16 - Prob. 39PCh. 16 - Prob. 40PCh. 16 - Salem Electronics currently produces two products:...Ch. 16 - Good Scent, Inc., produces two colognes: Rose and...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Review the completed master budget and answer the following questions: Is Ranger Industries expecting to earn a profit during the next quarter? If so, how much? Does the company need to borrow cash during the quarter? Can it make any repayments? Explain. (Carefully review rows 74 through 80.)arrow_forwardGibson Corporation, which has three divisions, is preparing its sales budget. Each division expects a different growth rate because economic conditions vary in different regions of the country. The growth expectations per quarter are 4 percent for Cummings Division, 2 percent for Springfield Division, and 6 percent for Douglas Division. Required a. Complete the sales budget by filling in the missing amounts. b. Determine the amount of sales revenue that the company will report on its quarterly pro forma income statements. Complete this question by entering your answers in the tabs below. Required A Required B Complete the sales budget by filling in the missing amounts. Note: Round your final answers to the nearest whole dollar amount. Division First Quarter Second Quarter Third Quarter Fourth Quarter Cummings Division $ 160,000 Springfield Division 390,000 Douglas Division 260,000 Required A Required B >arrow_forwardAs a manager responsible for an operating budget, you will usually be expected to compare your department's actual expenses to your budgeted expenses as well as to its performance in prior periods. True FalseMy nephew has promised to repay a loan by making $1,200.00 payments in April of each of the next 5 years. Using the Present Value Table found in Appendix 13-A on page 141, and assuming an interest rate of 5%, what is the value of these payments?arrow_forward
- Draaksh has budgeted sales of $8.7million for the next fiscal year. what is the companys margin of safety in dollars and as a percentage of budgeted sales?arrow_forwardAs a manager responsible for an operating budget, you will usually be expected to compare your department's actual expenses to your budgeted expenses as well as to its performance in prior periods. True FalseMy nephew has promised to repay a loan by making $1,200.00 payments in April of each of the next 5 years. Using the Present Value Table found in Appendix 13-A on page 141, and assuming an interest rate of 5%, what is the value of these payments? a. $3,917.04 b. $4,329.40 c. $5,195.28 d.arrow_forwardReso tubes was preparing a budgeted income statement for 2019 and has accumulated the following information. Predicted sales for the year are P730,000 and cost of goods sold is 40% of sales. The expected selling expenses are 81,000 and the expected general and administrative expenses are 90,000, which includes P23,000 of depreciation. Income tax rate is 30%. Compute budgeted net income for the year 2019?arrow_forward
- Mars Company is in the period of budgeting for next year. The Sales manager forecasted the number of units to be sold as 5000 units and determined the selling price at 10 OMR per unit. The management revised these estimates with a 10% decrease in seling price and with a 20 % increase in the number of units sold. According to these revised estimates, which of the following is the revised Sales (OMR)? Select one: a. OMR 44000 b. OMR 54000 c. OMR 66000 G. OMR 50000arrow_forwardThe next two questions are based on the following information: Herald company, a jacket selling company, prepares its master budget for the year 2020 on a quarterly basis. The budget officer has gathered the following data: 1 Estimated Sales for each quarter is $230,000. All sales are on credit and all sales are collected in the following quarter. 2 Cost of goods sold for each quarter is $100,000. 3 Variable selling and adminstrative expenses for each jacket are 10% sales commission. 4 Fixed selling and adminstrative (S&A) expenses for the year are: Advertising 60,000 120,000 40,000 20,000 240,000 Executive salaries Insurance Depreciation Total fixed S&A expenses 5 The company expects to borrow $80,000 on April, 1, 2020. No principal will be repaid during the year; Interest rate at an annual rate of 10% is due quarterly. 6 The company will declare $3,000 dividend in December 2020, which will be paid in January 2021. 10 How much is the net income for the year 2020? А. $179,000 $182,000…arrow_forwardplease explain step-by-step how to calculate an operational budget with the information provided: The time window would be in a year of operation total expenses for the year would be $22,298.57 projected income for the year would be $64,000arrow_forward
- Pronghorn Company’s budgeted sales and budgeted cost of goods sold for the coming year are $137,590,000 and $87,840,000, respectively. Short-term interest rates are expected to average 10%. If Pronghorn can increase inventory turnover from its present level of 9 times a year to a level of 12 times per year.Compute its expected cost savings for the coming year.arrow_forwardStan Corporation budgeted sales and gross profit rate for the coming month are P288M and 37.5 %, respectively. Short term interest rates are expected to average 6%. If Stan could increase the inventory turnover from its current 8.0 times to 10.0 times per year, its expected cost savings on the current year would be?arrow_forwardIn the previous year, Company E sold 10,000 units for $328,000. In the coming year they are anticipating selling 20% more units than last year. Assuming they do not change their selling price, what is their budgeted revenue for the upcoming year?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Excel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Excel Applications for Accounting Principles
Accounting
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Cengage Learning
Responsibility Accounting| Responsibility Centers and Segments| US CMA Part 1| US CMA course; Master Budget and Responsibility Accounting-Intro to Managerial Accounting- Su. 2013-Prof. Gershberg; Author: Mera Skill; Rutgers Accounting Web;https://www.youtube.com/watch?v=SYQ4u1BP24g;License: Standard YouTube License, CC-BY