Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134128528
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
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Chapter 7, Problem 7.26AE
1.
To determine
To compute: Sales volume required to maintain the same level of profit.
2.
To determine
To compute: The reduction in the cost of the fixed cost required to maintain the prior profit level of $216,000.
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S20-7 Calculating breakeven point in units, contribution margin ratio given
Learning Objective 3
Ocean Company sells a product with a contribution margin ratio of 80%. Fixed
costs are $2,800 per month. What amount of sales (in dollars) must Ocean
Company have to break even? If each unit sells for $30, how many units must be
sold to break even?
c03 Use target costing to analyze data (Learning Objective 2)
See the Winter Sports Inc. data from S8-2. Assume that Winter Sports' reputation has
diminished and other resorts in the vicinity are charging only $65 per lift ticket. Winter
Sports has become a price-taker and won't be able to charge more than its competitors.
At the market price, Winter Sports' managers believe they will still serve 750,000 skiers
and snowboarders each season.
1. If Winter Sports can't reduce its costs, what profit will it earn? State your answer in
dollars and as a percent of assets. Will investors be happy with the profit level? Show
your analysis.
2. Assume that Winter Sports has found ways to cut its fixed costs to $30 million. What
is its new target variable cost per skier/snowboarder? Assume investors want to earn
a 15% return on assets. Compare this to the current variable cost per skier/
snowboarder. Comment on your results.
E-LEARNING COST ACCOUNTING ASSIGNMENT
Answer all the THREE Questions.
1 Mr Gardens, the financial controller of Sugarland Ltd, accidentally tossed the company's cost
records into a wastebasket which had been light .On realising that mistake, he rushed to the
roaring blaze and managed to retrieve only a few of the records. From the salvaged records, he
managed to determine the following facts about the current year 2020:
(i) Sales totaled sh 1,000,000 during 2020.
(ii) The beginning inventories for the year were: work in progress sh 120,000;
Finished goods sh 60,000.
(iii) There were no closing inventories of raw materials.
(iv) Direct labor is equal to 25% of conversion cost; direct, labor is also equal to 40%
of prime cost.
(v) The work in progress inventory decreased by sh 20,000 during the year.
(vi)Gross margin during the year was 55% of sales.
(vii) Manufacturing overheads amounted to sh 240,000 in the year.
(iv) Administrative expenses for 2014 were twice as great as net income…
Chapter 7 Solutions
Managerial Accounting (5th Edition)
Ch. 7 - (Learning Objective 1) The contribution margin is...Ch. 7 - (Learning Objective 1) The contribution margin...Ch. 7 - (Learning Objective 2) The formula to find the...Ch. 7 - Prob. 4QCCh. 7 - Prob. 5QCCh. 7 - Prob. 6QCCh. 7 - (Learning Objective 4) Which of the following is...Ch. 7 - Prob. 8QCCh. 7 - Prob. 9QCCh. 7 - Prob. 10QC
Ch. 7 - Compute unit contribution margin and contribution...Ch. 7 - Prob. 7.2SECh. 7 - Prob. 7.3SECh. 7 - Find target profit volume (Learning Objective 2)...Ch. 7 - Prob. 7.5SECh. 7 - Prob. 7.6SECh. 7 - Prob. 7.7SECh. 7 - Prob. 7.8SECh. 7 - Compute margin of safety (Learning Objective 5)...Ch. 7 - Compute and use operating leverage factor...Ch. 7 - Calculate breakeven and target profit sales...Ch. 7 - Prob. 7.12SECh. 7 - Prob. 7.13SECh. 7 - Prob. 7.14SECh. 7 - Compute margin of safety (Learning Objective 5)...Ch. 7 - Compute and use operating leverage factor...Ch. 7 - Prob. 7.17SECh. 7 - Prob. 7.18SECh. 7 - Prepare contribution margin income statements...Ch. 7 - Work backward to find missing information...Ch. 7 - Find breakeven and target profit volume (Learning...Ch. 7 - Prob. 7.22AECh. 7 - Prob. 7.23AECh. 7 - Prob. 7.24AECh. 7 - Prob. 7.25AECh. 7 - Prob. 7.26AECh. 7 - Sustainability and CVP concepts (Learning...Ch. 7 - Prob. 7.28AECh. 7 - Calculate contribution margin and breakeven...Ch. 7 - Prob. 7.30AECh. 7 - Extension of E7-30A: Multiproduct firm (Learning...Ch. 7 - Prob. 7.32AECh. 7 - Breakeven and an advertising decision at a...Ch. 7 - Prob. 7.34AECh. 7 - Prob. 7.35AECh. 7 - Prob. 7.36AECh. 7 - Comprehensive CVP analysis (Learning Objectives 1,...Ch. 7 - Comprehensive CVP analysis (Learning Objectives 1,...Ch. 7 - Prob. 7.39AECh. 7 - Prob. 7.40BECh. 7 - Work backward to find missing information...Ch. 7 - Find breakeven and target profit volume (Learning...Ch. 7 - Prob. 7.43BECh. 7 - Prob. 7.44BECh. 7 - Prob. 7.45BECh. 7 - Prob. 7.46BECh. 7 - Continuation of E7-46B: Changing business...Ch. 7 - Sustainability and CVP (Learning Objective 3)...Ch. 7 - Prob. 7.49BECh. 7 - Prob. 7.50BECh. 7 - Prob. 7.51BECh. 7 - Prob. 7.52BECh. 7 - Find breakeven for a multiproduct firm (Learning...Ch. 7 - Breakeven and an advertising decision at a...Ch. 7 - Compute margin of safety and operating leverage...Ch. 7 - Use operating leverage factor to find fixed costs...Ch. 7 - Prob. 7.57BECh. 7 - Comprehensive CVP analysis (Learning Objectives 1,...Ch. 7 - Prob. 7.59BECh. 7 - Comprehensive CVP analysis (Learning Objectives 1,...Ch. 7 - Find missing data in CVP relationships (Learning...Ch. 7 - Prob. 7.62APCh. 7 - Prob. 7.63APCh. 7 - Prob. 7.64APCh. 7 - Prob. 7.65APCh. 7 - Prob. 7.66APCh. 7 - Find missing data in CVP relationships (Learning...Ch. 7 - Prob. 7.68BPCh. 7 - Comprehensive CVP problem (Learning Objectives 1,...Ch. 7 - Prob. 7.70BPCh. 7 - Prob. 7.71BPCh. 7 - CVP analysis at a multiproduct firm (Learning...Ch. 7 - Prob. 7.73SCCh. 7 - Discussion Questions 1. Define breakeven point....Ch. 7 - Prob. 7.75ACTCh. 7 - Prob. 7.76ACTCh. 7 - Prob. 7.77ACT
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