Concept explainers
Concept introduction:
Cost Volume Profit (CVP) Analysis:
The Cost Volume Profit analysis is the analysis of the relation between cost, volume, and profit of a product. It analyzes the cost and profits at the different level of production, in order to determine the breakeven point and required the level of sales to earn the desired profit.
Contribution margin means the margin that is left with the company after recovering variable cost out of revenue earned by selling smart phones. The formula for contribution margin is as follows:
Contribution margin = Sales - Variable cost.
Similarly contribution margin ratio = Contribution/sales
Breakeven Point:
The Breakeven point is the level of sales at which the net profit is nil. It can be explained as a situation where the business is generating a sale that is equal to the expenses incurred and hence no
To calculate:
The number of units sold
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Managerial Accounting
- (a2) Dorothy's Boards sells a snowboard, Xpert, that is popular with snowboard enthusiasts. Information relating to Dorothy's purchases of Xpert snowboards during September is shown below. During the same month, 120 Xpert snowboards were sold. Date Explanation Units Unit Cost Total Cost Sept. 1 Inventory 25 $66 $1,650 Sept. 12 Purchases 45 70 3,150 Sept. 19 Purchases 15 72 Sept. 26 Purchases 50 772 1,080 75 3,750 Totals 135 $9.630 Additional data regarding Dorothy's sales of Xpert snowboards are provided below. Assume that Dorothy's uses a perpetual inventory system. Date Units Unit Price Total Revenue Sept. 5 Sale 10 $190 $1,900 Sept. 16 Sale 50 190 9,500 Sept. 29 Sale 60 206 12,360 Totals 120 $23,760 X Your answer is incorrect. Compute ending inventory at September 30 using FIFO, LIFO, and moving-average cost. (Round average-cost per unit to 2 decimal places, eg. 12.50 and final answer to O decimal places, e.g. 1,250.) The ending inventory FIFO 4725 LIFO 5225 MOVING AVERAGE COST…arrow_forwardProvide all relevant journal entries for the following scenarios (please provide the date on when each journal entry is recorded): 1) Scenario 1: Earthwear ordered 20 kayaks for $ 1,250 each from manufacturer B and paid the full amount on May 6th. The manufacturer shipped 10 kayaks out on May 8th which arrived on May 14th, and shipped the rest of the order out on May 25th which arrived on June 3rd. 2) Scenario 2: Earthwear ordered 40 snowboards on account for $500 each from manufacturer F on September 8th. Manufacturer offered a 2% discount if Earthwear pays the invoice within 30 days. The manufacturer shipped out all 40 snowboards on September 10th and all arrived on September 16th. Earthwear paid the full amount outstanding on October 5th.arrow_forwardRefer to the following information from a long term care facility for questions 6-10. April May June Ending Food Inventory 2319 2831 2462 Food Purchased 8126 9037 8496 Labor costs 12363 11974 12197 Supply costs 512 592 551 6282 Operating Costs 6791 6547 119 121 123 Average Daily Census What is the value of the food used in June? OA. $11,327 B. $10,958 O C. $8496 O D. $8865 QUESTION 7 Click Save and Submit to save and submit. Click Save All Answers to save all answers.arrow_forward
- REI sells snowboards. Assume the following information relates to REI's purchases of snowboards during September. During the same month, 106 snowboards were sold. Date Sept. 1 Sept. 12 Sept. 19 Sept. 26 Date Explanation Units Unit Cost Inventory $110 Sept. 5 Sept. 16 Sept. 29 Purchases Purchases Purchases. Totals Sale Sale Sale Totals Units 8 47 51 13 106 45 55 Additional data regarding the company's sales of snowboards are provided below. Assume that REI uses a perpetual inventory system. 22 135 113 114 115 Total Cost $1,430 5,085 6,270 2,530 $15,315arrow_forwardSadia sells car first aid kits by mail order. The cost to her of each kit purchased from the manufacturer is £12.50. Her selling price per kit is £18.25. At the beginning of August 20XI she has 180 kits in inventory. She sells 250 kits during August 20X1 and has 153 left in inventory at the end of the month. How many first aid kits has Sadia purchased in August 20X1? A. 277 B. 403 C. 250 D. 223arrow_forwardCan you please show all of your work and show where you are getting the numbers from? Thank you. Barbara's Boards sells a snowboard, Xpert, that is popular with snowboard enthusiasts. Information relating to Barbara's purchases of Xpert snowboards during September is shown below. During the same month, 130 Xpert snowboards were sold. Date Explanation Units Unit Cost Total Cost Sept. 1 Inventory 30 $90 $2,700 Sept. 12 Purchases 50 96 4,800 Sept. 19 Purchases 15 100 1,500 Sept. 26 Purchases 50 104 5,200 Totals 145 $14,200 Additional data regarding Barbara's sales of Xpert snowboards are provided below. Assume that Barbara's uses a perpetual inventory system. Date Units Unit Price Total Revenue Sept. 5 Sale 20 $185 $3,700 Sept. 16 Sale 50 185 9,250 Sept. 29 Sale 60 208 12,480 Totals 130 $25,430 Calculate moving average cost at Sept 1, 5, 12, 16, 19, 26 & 29. (Round answers 2 decimal places, e.g. 1.25.) September 1 %24 90 September 5 %24 September 12 %24 93.75 September 16 %24 September 19…arrow_forward
- Engberg Company installs lawn sod in home yards. The company’s most recent monthly contribution format income statement follows:bre27076_ch06_256-305.indd 292 7/14/09 11:44:37 PMAmount Percent of SalesSales ............................................ $80,000 100%Variable expenses ....................... 32,000 40%Contribution margin ..................... 48,000 60%Fixed expenses ........................... 38,000Net operating income .................. $10,000Required:1. Compute the company’s degree of operating leverage.2. Using the degree of operating leverage, estimate the impact on net operating income of a 5% increasein sales.3. Verify your estimate from part (2) above by constructing a new contribution format income statementfor the company assuming a 5% increase in sales.arrow_forwardq2: Junko Company manufactures financial calculators and produced 97,000 units during the year. The finished goods inventory was 1,260 units on January 1 and 1,040 units on December 31. The average unit cost is $118, what was the cost of goods manufactured and the cost of goods sold for the year? Please choose the correct option and show your calculation to validate your selection: A. $11,446,000 & $11,471,960 B. $10,839,680 & $11,446,000 C. $11,446,000 & $12,839,680 D. $10,888,240 & $11,446,000arrow_forwarda. How many people visited one of the three coffee shops on Monday? b. What percent of people visited either PlanetEuro or Frothies on Monday? c. If Alicia had been able to achieve the same percentage of visitors for the entire week as she does on Monday, how many ADDITIONAL people would then visit Cool Beans?arrow_forward
- Mather sells a snowboard, EZslide, that is popular with snowboard enthusiasts. Below is information relating to Mather’s purchases of EZslide snowboards during September. During the same month, 102 EZslide snowboards were sold. Date Explanation Units Unit Cost Total Cost Sept. 1 Inventory 12 $100 $1,200 Sept. 12 Purchases 45 103 4,635 Sept. 19 Purchases 50 104 5,200 Sept. 26 Purchases 20 105 2,100 Totals 127 $13,135 Additional data regarding the company’s sales of EZslide snowboards are provided below. Assume that Mather uses a perpetual inventory system. Date Units Sept. 5 Sale 8 Sept. 16 Sale 48 Sept. 29 Sale 46 Totals 102 Calculate the average unit cost. (Round answers to 3 decimal places, e.g. 5.125.) September 1 $ 100 September 5 $ ? September 12 $ ?…arrow_forwardSports Haven keeps an inventory of FITBIT Wearable Technology. Assume an inventory of 35 FitBits at the beginning of the year at a cost of $44.32 each. Additional FitBits were purchased as follows: 15 at $45.50 each on March 22, 30 at $45.80 each on May 2, 10 at $46.20 each on July 14, and 40 at $43.90 each on September 9. Refer to the previous problem's answer. What was the Cost of Goods Sold (COGS)?arrow_forwardE-Max sold 40 laptops during November and their purchases are given below. Calculate the cost of goods sold by E-Max using average cost method. Purchases No of Laptops Cost/Unit November 10 13 80 November 18 25 100 November 27 30 120 a. 2940 RO b. 4600 RO c. 4200 RO d. 3780 ROarrow_forward
- Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub