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 3.40P
CVP analysis, margin of safety. Marketing Docs prepares marketing plans for growing businesses. For 2017, budgeted revenues are $1,500,000 based on 500 marketing plans at an average rate per plan of $3,000. The company would like to achieve a margin of safety percentage of at least 45%. The company’s current fixed costs are $400,000 and variable costs average $2,000 per marketing plan. (Consider each of the following separately.)
- 1. Calculate Marketing Docs’ breakeven point and margin of safety in units.
Required
- 2. Which of the following changes would help Marketing Docs achieve its desired margin of safety?
- a. The average revenue per customer increases to $4,000.
- b. The planned number of marketing plans prepared increases by 5%.
- c. Marketing Docs purchases new software that results in a 5% increase to fixed costs but reduces variable costs by 10% per marketing plan.
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Marketing Docs prepares marketing plans for growing businesses. For 2017, budgeted revenues are $1,500,000 based on 500 marketing plans at an average rate per plan of $3,000. The company would like to achieve a margin of safety percentage of at least 45%. The company’s current fixed costs are $400,000 and variable costs average $2,000 per marketing plan.
Q.Which of the following changes would help Marketing Docs achieve its desired margin of safety?
a. The average revenue per customer increases to $4,000.
b. The planned number of marketing plans prepared increases by 5%.
c. Marketing Docs purchases new software that results in a 5% increase to fixed costs but reduces variable costs by 10% per marketing plan.
Integrated Excel: Preparing a Contribution Format Income Statement Using the High-Low Method
Jay Corporation has provided data from a two-year period to aid in planning. The Controller has asked you to prepare a contribution
format income statement.
Budgeted information for Quarter 1 of 2024:
Sales in units
Sales price per unit
After analyzing expenses, the company has determined the following cost patterns.
Cost of Goods Sold (per unit)
Sales Commissions (per dollar of sales).
Administrative Salaries (per quarter)
Rent Expense (per quarter)
Depreciation Expense (per quarter)
Shipping has been determined to be a mixed cost with the following total costs and units:
2022
Quarter 1
Quarter 2
Quarter 3
Quarter 4
2023
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Total Cost
$ 67,000
$ 94,000
$ 89,800
$ 92,600
$ 72,500
$80,000
$ 84,000
$ 100,000
17,000
$ 48.00
Units
12,500
21,000
13,800
20,000
13,700
14,000
14,300
22,500
$29.00
9.50€
$ 45,000
$ 27,000
$ 36,000
Required:
Use the data to answer the…
Please help me with the functions for this ! Thank you!
Jay Corporation has decided to prepare contribution income statements for internal planning.
Budgeted information for Quarter 1 of 2024:
Sales in units
17,000
Sales price per unit
$48.00
After analyzing expenses, the company has determined the following cost patterns.
Cost of Goods Sold (per unit)
$29.00
Sales Commissions (per dollar of sales)
9.50%
Administrative Salaries (per quarter)
$45,000
Rent Expense (per quarter)
$27,000
Depreciation Expense (per quarter)
$36,000
Shipping has been determined to be a mixed cost with the following total costs and units:
2022
Total Cost
Units
Quarter 1
$67,000
12,500
Quarter2
$94,000
21,000
Quarter 3
$89,800
13,800
Quarter 4
$92,600
20,000
2023
Quarter 1
$72,500
13,700
Quarter2
$80,000
14,000
Quarter 3
$84,000
14,300
Quarter…
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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