Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
16th Edition
ISBN: 9780134475585
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Chapter 3, Problem 3.25E
CVP exercises. The Doral Company manufactures and sells pens. Currently 5,000,000 units are sold per year at $0.50 per unit. Fixed costs are $900,000 per year. Variable costs are $0.30 per unit.
Consider each case separately:
- a. What is the current annual operating income?
Required
- b. What is the current breakeven point in revenues?
Compute the new operating income for each of the following changes:
- 1. A $0.04 per unit increase in variable costs
- 2. A 10% increase in fixed costs and a 10% increase in units sold
- 3. A 20% decrease in fixed costs, a 20% decrease in selling price, a 10% decrease in variable cost per unit, and a 40% increase in units sold
Compute the new breakeven point in units for each of the following changes:
- 4. A 10% increase in fixed costs
- 5. A 10% increase in selling price and a $20,000 increase in fixed costs
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The Sunshine Company manufactures and sells pens. Currently, 6,000,000 units are sold per year at $0.70 per unit. Fixed costs are $980,000 per year. Variable costs are $0.30 per unit.Consider each case separately:Required:1. a. What is the current annual operating income?b. What is the current breakeven point in revenues?Compute the new operating income for each of the following changes:2. A $0.03 per unit increase in variable costs3. A 12% increase in fixed costs and a 10% increase in units sold4. A 18% decrease in fixed costs, a 20% decrease in selling price, a 10% decrease in variablecost per unit, and a 40% increase in units soldCompute the new breakeven point in units for each of the following changes:4. A 10% increase in fixed costs5. A 10% increase in selling price and a $20,000 increase in fixed costs
The Sunshine Company manufactures and sells pens. Currently, 6,000,000 units are sold per year at $0.70 per unit. Fixed costs are $980,000 per year. Variable costs are $0.30 per unit.Consider each case separately:Required:1. a. What is the current annual operating income?b. What is the current breakeven point in revenues?Compute the new operating income for each of the following changes:2. A $0.03 per unit increase in variable costs3. A 12% increase in fixed costs and a 10% increase in units sold4. A 18% decrease in fixed costs, a 20% decrease in selling price, a 10% decrease in variablecost per unit, and a 40% increase in units soldCompute the new breakeven point in units for each of the following changes:4. A 10% increase in fixed costs5. A 10% increase in selling price and a $20,000 increase in fixed costs(please give the solution of part 4,4,5 of this question, previous are already solved by you
The Doral Company manufactures and sells pens. Currently, 5,000,000 units are sold per year at $0.50 per unit. Fixed costs are $900,000 per year. Variable costs are $0.30 per unit.
Consider each case separately:
Q1. a. What is the current annual operating income?
b. What is the current breakeven point in revenues?
Compute the new operating income for each of the following changes:
Q2. A $0.04 per unit increase in variable costs
Q3. A 10% increase in fixed costs and a 10% increase in units sold
Q4. A 20% decrease in fixed costs, a 20% decrease in selling price, a 10% decrease in variable cost per unit, and a 40% increase in units sold
Compute the new breakeven point in units for each of the following changes:
Q5. A 10% increase in fixed costs
Q6. A 10% increase in selling price and a $20,000 increase in fixed costs
Chapter 3 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Ch. 3 - Define costvolumeprofit analysis.Ch. 3 - Describe the assumptions underlying CVP analysis.Ch. 3 - Distinguish between operating income and net...Ch. 3 - Prob. 3.4QCh. 3 - Prob. 3.5QCh. 3 - Why is it more accurate to describe the subject...Ch. 3 - CVP analysis is both simple and simplistic. If you...Ch. 3 - Prob. 3.8QCh. 3 - Prob. 3.9QCh. 3 - Give an example of how a manager can decrease...
Ch. 3 - Give an example of how a manager can increase...Ch. 3 - What is operating leverage? How is knowing the...Ch. 3 - There is no such thing as a fixed cost. All costs...Ch. 3 - Prob. 3.14QCh. 3 - In CVP analysis, gross margin is a less-useful...Ch. 3 - Jacks Jax has total fixed costs of 25,000. If the...Ch. 3 - During the current year, XYZ Company increased its...Ch. 3 - Under the contribution income statement, a...Ch. 3 - A company needs to sell 10,000 units of its only...Ch. 3 - Once a company exceeds its breakeven level,...Ch. 3 - Prob. 3.21ECh. 3 - CVP computations. Garrett Manufacturing sold...Ch. 3 - CVP analysis, changing revenues and costs. Sunset...Ch. 3 - CVP exercises. The Deli-Sub Shop owns and operates...Ch. 3 - CVP exercises. The Doral Company manufactures and...Ch. 3 - CVP analysis, income taxes. Westover Motors is a...Ch. 3 - CVP analysis, income taxes. The Home Style Eats...Ch. 3 - CVP analysis, sensitivity analysis. Perfect Fit...Ch. 3 - CVP analysis, margin of safety. Suppose Morrison...Ch. 3 - Operating leverage. Cover Rugs is holding a 2-week...Ch. 3 - CVP analysis, international cost structure...Ch. 3 - Sales mix, new and upgrade customers. Chartz 1-2-3...Ch. 3 - Prob. 3.33ECh. 3 - Prob. 3.34ECh. 3 - Contribution margin, decision making. Welch Mens...Ch. 3 - Contribution margin, gross margin, and margin of...Ch. 3 - Uncertainty and expected costs. Kindmart is an...Ch. 3 - CVP analysis, service firm. Lifetime Escapes...Ch. 3 - CVP, target operating income, service firm....Ch. 3 - CVP analysis, margin of safety. Marketing Docs...Ch. 3 - CVP analysis, income taxes. (CMA, adapted) J.T....Ch. 3 - CVP, sensitivity analysis. The Derby Shoe Company...Ch. 3 - CVP analysis, shoe stores. The HighStep Shoe...Ch. 3 - CVP analysis, shoe stores (continuation of 3-43)....Ch. 3 - Prob. 3.45PCh. 3 - Prob. 3.46PCh. 3 - CVP analysis, income taxes, sensitivity. (CMA,...Ch. 3 - Choosing between compensation plans, operating...Ch. 3 - Prob. 3.49PCh. 3 - Multiproduct CVP and decision making. Crystal...Ch. 3 - Sales mix, two products. The Stackpole Company...Ch. 3 - Prob. 3.52PCh. 3 - Ethics, CVP analysis. Megaphone Corporation...Ch. 3 - Deciding where to produce. (CMA, adapted) Portal...
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