Question

CALCULATOR FULL SCREEN PRINTER VERSION Problem 18-06A Oriole Corporation has collected the following information after its first year of sales. Sales were $1,600,000 on 100,000 units, selling expenses $220,000 (40% variable and 60% fixed), direct materials $490,000, direct labor $316,000, administrative expenses $284,000 (20% variable and 80% foed), and manufacturing overhead $356,000 (70% variable and 30% fixed). Top management has asked you to do a CVP analysis so that it can make plans for the coming year. It has projected that unit sales will increase by 10% next year. Васк NEXT v Study Compute (1) the contribution margin for the current year and the projected year, and (2) the fixed costs for the current year. (Assume that fixed costs will remain the same in the projected year) (1) Contribution margin for current year Contribution margin for projected year (2) Fixed Costs Compute the break-even point in units and sales dollars for the current year. Break-even point in units units Break-even point in dollars The company has a target net income of $202,000. What is the required sales in dollars for the company to meet its

Answer 1

Ansoner: I Contribution. Margin for cercent years at Amount (6) Sales $ 1,660,000 less: Variable costs direct material ($44,90.000) direct laban ($ 310,0001 Variable Adminislative expenses ($ 56,800) ... ($ 2.8LDOON REAL Variable Manufacturing OH ($49200) C$356.000 vs Toil). 1 903 - Variable selling expenses (888,000) - ($220,000 x lot.) Contribuctos Margin 1 $ 400.000 e) Contribution margin for prospeeled year! lacrease in sales in projected year 10%. i burease in contributoo mangio sed spend $400,N.o. Toled. codicibukos magain for projected year s e $400,000 + €10,000 -=_$640000 $ Leopo

له المعانگ لحم - Particulane . Amount (I) $ 132,000 $ 227,200 fined selling expenses $120,000 x 60/) Fixed Administrative expenses. ($ 284,000 a 80%) fined Manufacturing of ( $256000 x Jol) A Total fixed costs. ..$ 106.800 $:4€6,000

| W Break ever goial is units fined costs x No of units = Contribution margin $ 666,000 $ 6400,000 mes 100,000 _3 116.500 vots 1 Breaks even point in dollars. - freak even point in unit, so sale price pe unit = 116.500 $1,600,000 - 700,000 __3 _864,000 co Required sales in & to meet farget income - Target Income . #202,000 - Fired costs + Tanget throme Contribution Horgin one o No of weilo se sabe poi Required sales & Ç66,50 + $200,000 $400,000 100,000 y 16. = $276-12.00

I if company meets the 20 - Sena S Margin of safety ratio target net income ctresਹ 6ੴ eve - - Required sales $2,672,000 - $1,8664,000 - 100 bloo معكم