Managerial Accounting
5th Edition
ISBN: 9781259176494
Author: John J Wild, Ken Shaw Accounting Professor
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 5, Problem 17E
To determine
Concept introduction:
A contribution margin income statement is a statement which shows the profit or loss for a entity for a particular product or overall performance.
The contribution margin ratio means calculated contribution in terms of percentage. The numerator part will be contribution amount and denominator part will net sales.
The break-even point formula is calculated as the total fixed costs of production part in numerator and price per unit less the variable costs to produce the product in denominator.
Requirement 1:
The amount of sales in dollars to achieve the target income.
To determine
Concept introduction:
A contribution margin income statement is a statement which shows the profit or loss for an entity for a particular product or overall performance.
The contribution margin ratio means calculated contribution in terms of percentage. The numerator part will be contribution amount and denominator part will have net sales.
The break-even point formula is calculated as the total fixed costs of production part in numerator and price per unit less the variable costs to produce the product in denominator.
Requirement 2:
The margin of safety in percentage.
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Students have asked these similar questions
Suppose a firm has had the following historic sales figures. What would be the forecast for next year's sales
using the average approach?
You must use the built-in Excel function to answer this question.
Input area:
Year
Sales
2016
2017
2018
es es e
$
1,500,000
$
1,750,000
$
1,400,000
2019
$
2,000,000
2020
$
1,600,000
Output area:
Next year's sales
The marketing department of Metroline Manufacturing estimates that its sales in 2016 will be $1.68 million. Interest expense is expected to remain unchanged at $35,000, and the firm plans to pay $66,000 in cash dividends during 2016. Metroline Manufacturing's income statement for the year ended December 31, 2015, is given along with a breakdown of the firm's cost of goods sold and operating expenses into their fixed and variable components.
a. Use the percent-of-sales method to prepare a pro forma income statement for the year ended December 31, 2016.
b. Use fixed and variable cost data to develop a pro forma income statement for the year ended December 31, 2016.
c. Compare and contrast the statements developed in parts a. and b. Which statement probably provides the better estimate of 2016 income? Explain why.
1. The annual net income of MAC Industries since 2005 is given
below.
Years t (since 2005)
Net Income
1
4
6
12
15
$1,500 $2,500 $2,875 $2,850 $2,250
a. Create a scatter plot that includes your curve of best fit on
top of the data. You should try several functions and make
your choice based on best r-squared value.
b. Find the year that Net Income was at its highest point.
c. What was the income in that year?
Chapter 5 Solutions
Managerial Accounting
Ch. 5 - Prob. 1MCQCh. 5 - Prob. 2MCQCh. 5 - Prob. 3MCQCh. 5 - Prob. 4MCQCh. 5 - Prob. 5MCQCh. 5 - Prob. 1DQCh. 5 - Prob. 2DQCh. 5 - When output volume increases, do fixed costs per...Ch. 5 - How is the cost-volume-profit analysis useful?Ch. 5 - Prob. 5DQ
Ch. 5 - Prob. 6DQCh. 5 - Prob. 7DQCh. 5 - Prob. 8DQCh. 5 - Prob. 9DQCh. 5 - Prob. 10DQCh. 5 - Prob. 11DQCh. 5 - Prob. 12DQCh. 5 - Prob. 13DQCh. 5 - Prob. 14DQCh. 5 - Prob. 15DQCh. 5 - Prob. 16DQCh. 5 - Prob. 17DQCh. 5 - Prob. 18DQCh. 5 - Prob. 19DQCh. 5 - APPLE Should Apple use single product or...Ch. 5 - Prob. 21DQCh. 5 - Prob. 1QSCh. 5 - Prob. 2QSCh. 5 - The following information is available for a...Ch. 5 - Prob. 4QSCh. 5 - Prob. 5QSCh. 5 - Prob. 6QSCh. 5 - Prob. 7QSCh. 5 - Prob. 8QSCh. 5 - Prob. 9QSCh. 5 - Prob. 10QSCh. 5 - Prob. 11QSCh. 5 - Prob. 12QSCh. 5 - Prob. 13QSCh. 5 - Prob. 14QSCh. 5 - Prob. 15QSCh. 5 - Prob. 16QSCh. 5 - Prob. 17QSCh. 5 - Following are five graphs representing various...Ch. 5 - Prob. 2ECh. 5 - Prob. 3ECh. 5 - Prob. 4ECh. 5 - Prob. 5ECh. 5 - Prob. 6ECh. 5 - Prob. 7ECh. 5 - Prob. 8ECh. 5 - Prob. 9ECh. 5 - Prob. 10ECh. 5 - Prob. 11ECh. 5 - Prob. 12ECh. 5 - Prob. 13ECh. 5 - Prob. 14ECh. 5 - Copper Company expect to sell 200,000 units of its...Ch. 5 - Prob. 16ECh. 5 - Prob. 17ECh. 5 - Prob. 18ECh. 5 - Prob. 19ECh. 5 - Prob. 20ECh. 5 - Prob. 21ECh. 5 - Prob. 22ECh. 5 - Prob. 23ECh. 5 - Prob. 24ECh. 5 - Prob. 25ECh. 5 - The following costs result from the production and...Ch. 5 - Prob. 2PSACh. 5 - Prob. 3PSACh. 5 - Astro Co. sold 20,000 units of its only product...Ch. 5 - Prob. 5PSACh. 5 - Prob. 6PSACh. 5 - Patriot Co. manufactures and sells three products:...Ch. 5 - Prob. 1PSBCh. 5 - Prob. 2PSBCh. 5 - Prob. 3PSBCh. 5 - Rivera Co. sold 20,000units of its only product...Ch. 5 - Prob. 5PSBCh. 5 - Prob. 6PSBCh. 5 - Prob. 7PSBCh. 5 - Prob. 5SPCh. 5 - Apple offers extended service contracts that...Ch. 5 - Prob. 2BTNCh. 5 - Prob. 3BTNCh. 5 - Prob. 4BTNCh. 5 - Prob. 5BTNCh. 5 - Prob. 6BTNCh. 5 - Fast Yeti Custom Tees, Launched by entrepreneurs...Ch. 5 - Prob. 8BTNCh. 5 - Access and review Samsungs website...
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