Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134128528
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 7, Problem 7.40BE
1.
To determine
To prepare: Contribution margin income statement at sales level of $200,000 $420,000.
2.
To determine
To compute: The breakeven sales in dollars.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
FunTime Cruiseline offers nightly dinner cruises departing from several cities on the east-
ern coast of the United States including Charleston, Baltimore, and Alexandria. Dinner
cruise tickets sell for $50 per passenger. FunTime Cruiseline's variable cost of providing
the dinner is $30 per passenger, and the fixed cost of operating the vessels (depreciation,
salaries, docking fees, and other expenses) is $210,000 per month. The company's rel-
evant range extends to 20,000 monthly passengers.
E7-34A Compute margin of safety and operating leverage (Learning Objective 5)
Terry's Towing Service has a monthly target operating income of $30,000. Variable expenses
are 40% of sales, and monthly fixed expenses are $7,500.
Requirements
1. Compute the monthly margin of safety in dollars if the shop achieves its income goal.
2. Express Terry's margin of safety as a percentage of target sales.
3. What is Terry's operating leverage factor at the target level of operating income?
4. Assume that the company reaches its target. By what percentage will the company's
operating income fall if sales volume declines by 12%?
Complete the problems. Chelk
3. Dabney Washington is paid a weekly comm1ssI
Sales of
the week?
or
Lesson Practice
Use the following commission schedule to find the total graduated
commission in Problems 5–8.
5% on First
8% on Next
10% on sales
Total
Sales Amount
$5,000
$10,000
Over $15,000
Commission
5.
$4,000
b.
С.
d.
Đ°.
6.
8,000
Đ°.
b.
d.
7.
18,000
b.
d.
Đ°.
8.
27,500
b.
a.
d.
$7,500 or on in of Last week
less and 3.0% on in of Nate's
9. Mary Robertson sells tires
Dabney's was of her sales for
4. Nate a of on sales of or
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
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- https://elearn.squ.edu.om/mod/quiz/attempt.php?attempt=1863256&cmid%3D886247 (SQU E-LEARNING SYSTEM (ACADI Managerial Accounting - Spring 34:29 úall á Jl Company XYZ is currently making sales of $200,000. At this level, the variable expenses were $160,000. Assume that company XYZ expects sales to increase to $250,000 in the coming period with no change is expected to fixed ?expenses. How much is the expected change in profit Increase by 40,000 .a Increase by $160,000 .b O E Increase by $50,000 .c O Increase by $10,000 .d O Cannot be determined .e Oarrow_forwardView Policies Show Attempt History Current Attempt in Progress Pharoah sells a learning system that helps preschool and elementary students learn basic math facts and concepts. The company's income statement from last month is as follows: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (a) Total $756,000 264,600 491,400 282,750 $ 208,650 Your answer is correct Per Unit $54 18.90 $35.10arrow_forwardS20-5 Preparing a contribution margin income statement Learning Objective 2 Gabelman Company sells a product for $95 per unit. Variable costs are $40 per unit, and fixed costs are $2,200 per month. The company expects to sell 570 units in September. Prepare an income statement for September using the contribution margin format.arrow_forward
- 7-23A Compute breakeven and project income (Learning Objectives 1 & 2)Grover’s Steel Parts produces parts for the automobile industry. The company hasmonthly fixed expenses of $630,000 and a contribution margin of 70% of revenues.Requirements1. Compute Grover’s Steel Parts’ monthly breakeven sales in dollars.2. Use the contribution margin ratio to project operating income (or loss) if revenues are$520,000 and if they are $1,010,000.3. Do the results in Requirement 2 make sense given the breakeven sales you computedin Requirement 1? Explain.arrow_forwardS20-6 Calculating breakeven point in units, contribution margin given Learning Objective 3 Mackler, Inc. sells a product with a contribution margin of $50 per unit. Fixed costs are $8,000 per month. How many units must Mackler sell to break even?arrow_forwardS20-7 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?arrow_forward
- Required information Learning Objective 05-P2: Compute the break-even point for a single-product company. A company's break-even point for a period is the sales volume at which total revenues equal total costs. To compute a break-even point in terms of sales units, we divide total fixed costs by the contribution margin per unit. To compute a break-even point in terms of sales dollars, divide total fixed costs by the contribution margin ratio. Cost-Volume-Profit Chart Dollars Maximum productive capacity = 1,800 units Sales = $180,000 $1800,000 $160,000 $140,000 $120,000 $100,000 Largest Income = $30,000 $80,000 Maximum productive capacity = 1,800 units Break-Even Point (sales of 800 units or $80,000) Total Sales Total Costsarrow_forwardLearning Tasks A. Discussion Questions: 1. Explain why a contribution margin per unit becomes profit per unit above the breakeven point. 2. Suppose a firm with a contribution margin percentage of 30% increased its advertising expenses by P10,000 and found that sales increased by P 30,000. Was it a good decision to increase advertising expenses? Suppose that the contribution margin ratio is now 40%. Would it be a good decision to increase advertising expense? B. Fill in the blanks for each of the following independent cases. Case Revenues Variable Cost Fixed Cost Total Costs Operating Contribution Income Margin Percentage A P500 P- P800 P1,200 2,000 1,000 В 300 200 C 700 1,000 ---- ---- 1,500 300 40% Assessment Taskarrow_forwardStudent ID #: 11. George Corporation has the following information for the current year: Selling price per Variable costs per unit Fixed costs unit 2$ 10.00 2$ 6.00 $1,000.00 Required: Prepare a cost-volume-profit graph identifying the following items: Total fixed costs line Total variable costs line Total costs line Total revenues line Breakeven point in sales dollars Breakeven point in units Profit area A. B. С. D. Е. F. G. Н. Loss area 6,000 5,000 4,000 3,000 2,000 1,000 Retm 100 200 300 400 500 Earnin Qty (# Units) 3 Dollars ($)arrow_forward
- Learning Objective 05-P2: Compute the break-even point for a single-product company. Skip to question A company’s break-even point for a period is the sales volume at which total revenues equal total costs. To compute a break-even point in terms of sales units, we divide total fixed costs by the contribution margin per unit. To compute a break-even point in terms of sales dollars, divide total fixed costs by the contribution margin ratio. Cost-Volume-Profit Chart Current Time 0:00 / Duration 1:56 1x Knowledge Check 01 Based on a CVP graph, select the correct drop-down answer for each question.arrow_forwardWord Problem Question 4: (You have to submit an image of your FULL solution to the question in eConestoga -> Course Tools -> Assignments [Final Exam Submission]) The information below shows the net income based on December sales for Comicon Entertainment Inc. Assume the selling price per unit is $1. Sales $180,000 Fixed Costs $80,600 Total Variable Costs $63,000 Total Costs $143,600 Net Income $36,400 (Show all $ answers in this question rounded (if necessary) to the nearest dollar, no decimal places. Only show decimal places on the Revenue and Cost Functions.) 1. What are the revenue and cost functions? (write them both in the box in any format, I'll mark manually) 2. Using an algebraic method, calculate the break-even point in sales dollars. decimal places. Only show decimal places on the Revenue and Cost Functions.) 1. What are the revenue and cost functions? (write them both in the box in any format, l'll mark manually) 2. Using an algebraic method, calculate the break-even point…arrow_forwardLearning Objective Product Tango has revenue of $1,150,000, variable cost of goods sold of $850,000, variable selling expenses of $275,000, and fixed costs of $125,000, creating an operating loss of $(100,000). a. Prepare a differential analysis as of February 13 to determine if Product Tango should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Differential Analysis Continue Product Tango (Alt. 1) or Discontinue Product Tango (Alt. 2) February 13 Revenues Costs: Variable cost of goods sold Variable selling and admin. expenses Fixed costs Profit (Loss) Continue Discontinue Product Product Tango Tango (Alternative 1) (Alternative 2) 1,150,000 0 -825,000 X -275,000 -125,000 100,000 X X X X X Differential Effects (Alternative 2) -1,150,000 850,000 275,000 0 -25,000 b. Determine if Product Tango should be continued (Alternative 1) or…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Excel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Excel Applications for Accounting Principles
Accounting
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Cengage Learning
Economic Value Added EVA - ACCA APM Revision Lecture; Author: OpenTuition;https://www.youtube.com/watch?v=_3hpcMFHPIU;License: Standard Youtube License