Homework Answers
(1)
variable costs = cost of goods sold + sales commission + variable portion of other operating costs
= $200000 + $65000 + $45000 = $310000
Contribution margin = revenue - variable costs
= $500000 - $310000
= $190000
(2)
contribution margin percentage = contribution margin/revenue
= $190000/$500000
= 38%
(3)
change in operating income = change in contribution margin - change in fixed costs
= {($500000 x 25%) x 38%} - $13000
= $47500 - $13000
= $34500
(4)
To improve operating income, Mr. Lurvey must find ways to:
- Increase his Contribution Margin by decreasing Variable Cost
- increase his Selling Price
- Decrease Fixed costs
Add Answer to:
Lurvey Men's Clothing's revenues and cost data for 2017 are as follows: BE(Click the icon to...
Godfroy Men's Clothing's revenues and cost data for 2017 are as follows: B (Click the icon...
Godfroy Men's Clothing's revenues and cost data for 2017 are as follows: B (Click the icon to view the data.) Mr. Godfroy, the owner of the store, is unhappy with the operating results. An analysis of other operating costs reveals that it includes $25,000 variable costs, which vary with sales volume, and $5,000 (fixed) costs. Read the requirements. Determine the formula to calculate the contribution margin, then enter the amounts in the formula to compute the contribution margin of Godfroy...
Lurvey Men's Clothing's revenues and cost data for 2017 are as follows: LOADING...(Click the icon to...
Lurvey Men's Clothing's revenues and cost data for 2017 are as follows: LOADING...(Click the icon to view the data.) Mr. Lurvey, the owner of the store, is unhappy with the operating results. An analysis of other operating costs reveals that it includes $ 25 comma 000 variable costs, which vary with sales volume, and $ 5 comma 000 (fixed) costs Revenue 500,000 cost of goods sold 250,000 gross margin 250,000 operating cost salaries fixed 130,000 sales commissions (10% of sales)...
Revenues $ 500,000 250,000 250,000 $ Cost of goods sold (all variable costs) Gross margin Operating...
Revenues $ 500,000 250,000 250,000 $ Cost of goods sold (all variable costs) Gross margin Operating costs: Salaries fixed Sales commissions (9% of sales) Depreciation on equipment and fixtures Store rent ($4,500 per month) Other operating costs 190,000 45,000 14,000 54,000 50,000 353,000 $ (103,000) Operating income (loss) Neylon Men's Clothing's revenues and cost data for 2017 are as follows: Click the icon to view the data.) Mr. Neylon, the owner of the store, is unhappy with the operating results....
Question 2. Contribution margin, decision making. McCarthy Men's Clothing's revenues and cost data for 2014 are...
Question 2. Contribution margin, decision making. McCarthy Men's Clothing's revenues and cost data for 2014 are as follows: $500,000 250,000 250,000 Revenues Cost of goods sold Gross margin Operating costs: Salaries fixed Sales commissions (11% of sales) Depreciation of equipment and fixtures Store rent ($4,000 per month) Other operating costs Operating income (loss) $160,000 55,000 15,000 48,000 40,000 |_ 318,000 $(68,000) Mr. McCarthy, the owner of the store, is unhappy with the operating results. An analysis of other operat-ing costs...
Please complete all 6 parts and highlight answer key. thank you Question Help McCarthy Men's Clothing's...
Please complete all 6 parts and highlight answer key. thank you
Question Help McCarthy Men's Clothing's revenues and cost data for 2017 are as foliows 311 Click the icon to view the data.) Mr. McCarthy, the owner of the store, is unhappy with the operating results. An analysis of other operating costs reveals that it includes $50.000 variable costs, which vary with sales volume, and $15.000 (d) costs Read the requirements Requirement 1. Compute the contribution margin of McCarthy Men's...
Need help with requirement 4 * E3-36 (similar to) Question Help presents the only operating income...
Need
help with requirement 4
* E3-36 (similar to) Question Help presents the only operating income statement shown here to George Gomez, a potential investor in the business. Help Mr. G Die Beauty mandatures and ses a face cream to small specially wores in the greater Los Angeles are understand Diva Beauty's cost structure Click the icon to view the operating income statement Read the rements © Data Table Requirement 1. Recast the income walement to emphasire contribution margin Diva...
The contribution margin income statement of Sweet Pea Donuts for August 2018 follows: (Click the icon...
The contribution margin income statement of Sweet Pea Donuts for August 2018 follows: (Click the icon to view the contribution margin income statement.) Sweet Pea sells four dozen plain donuts for every dozen custard-filled donuts. A dozen plain donuts sells for $4.00, with total variable cost of $1.60 per dozen. A dozen custard-filled donuts sells for $8.00, with total variable cost of $3.20 per dozen. Read the requirements Requirement 1. Calculate the weighted average contribution margin. (Round all currency amounts...
Please explain requirement 4 in great detail. E3-36 (similar to) High End Beauty manufactures and sells...
Please explain requirement 4 in great detail.
E3-36 (similar to) High End Beauty manufactures and sells a face cream to small specialty stores in the greater Los Angeles a Lopez understand High End Beauty's cost structure. (Click the icon to view the operating income statement.) Read the requirements. 1 Requirements 1. Recast the income statement to emphasize contribution margin. 2. Calculate the contribution margin percentage and breakeven point in units and revenues for June 2017 3. What is the margin...
The HighStep Shoe Company operates a chain of shoe stores that sell 10 different styles of...
The HighStep Shoe Company operates a chain of shoe stores that sell 10 different styles of inexpensive men's shoes with identical unit costs and selling prices. A unit is defined as a pair of shoes. Each store has a store manager who is paid a fixed salary. Individual salespeople receive a fixed salary and a sales commission. HighStep is considering opening another store that is expected to have the revenue and cost relationships shown here. (Click the icon to view...
Suppose Garrett Corp.'s breakeven point is revenues of $1,400,000. Fixed costs are $630,000 Requirements 1. Compute...
Suppose Garrett Corp.'s breakeven point is revenues of $1,400,000. Fixed costs are $630,000 Requirements 1. Compute the contribution margin percentage. 2. Compute the selling price if variable costs are $11 per unit. 3. Suppose 90,000 units are sold. Compute the margin of safety in units and dollars. 4. What does this tell you about the risk of Garrett making a loss? What are the most likely reasons for this risk to increase? Requirement 1. Compute the contribution margin percentage Determine...
Godfroy Men's Clothing's revenues and cost data for 2017 are as follows: B (Click the icon to view the data.) Mr. Godfroy, the owner of the store, is unhappy with the operating results. An analysis of other operating costs reveals that it includes $25,000 variable costs, which vary with sales volume, and $5,000 (fixed) costs. Read the requirements. Determine the formula to calculate the contribution margin, then enter the amounts in the formula to compute the contribution margin of Godfroy...
Revenues $ 500,000 250,000 250,000 $ Cost of goods sold (all variable costs) Gross margin Operating costs: Salaries fixed Sales commissions (9% of sales) Depreciation on equipment and fixtures Store rent ($4,500 per month) Other operating costs 190,000 45,000 14,000 54,000 50,000 353,000 $ (103,000) Operating income (loss) Neylon Men's Clothing's revenues and cost data for 2017 are as follows: Click the icon to view the data.) Mr. Neylon, the owner of the store, is unhappy with the operating results....
Question 2. Contribution margin, decision making. McCarthy Men's Clothing's revenues and cost data for 2014 are as follows: $500,000 250,000 250,000 Revenues Cost of goods sold Gross margin Operating costs: Salaries fixed Sales commissions (11% of sales) Depreciation of equipment and fixtures Store rent ($4,000 per month) Other operating costs Operating income (loss) $160,000 55,000 15,000 48,000 40,000 |_ 318,000 $(68,000) Mr. McCarthy, the owner of the store, is unhappy with the operating results. An analysis of other operat-ing costs...
Please complete all 6 parts and highlight answer key. thank you
Question Help McCarthy Men's Clothing's revenues and cost data for 2017 are as foliows 311 Click the icon to view the data.) Mr. McCarthy, the owner of the store, is unhappy with the operating results. An analysis of other operating costs reveals that it includes $50.000 variable costs, which vary with sales volume, and $15.000 (d) costs Read the requirements Requirement 1. Compute the contribution margin of McCarthy Men's...
Need
help with requirement 4
* E3-36 (similar to) Question Help presents the only operating income statement shown here to George Gomez, a potential investor in the business. Help Mr. G Die Beauty mandatures and ses a face cream to small specially wores in the greater Los Angeles are understand Diva Beauty's cost structure Click the icon to view the operating income statement Read the rements © Data Table Requirement 1. Recast the income walement to emphasire contribution margin Diva...
The contribution margin income statement of Sweet Pea Donuts for August 2018 follows: (Click the icon to view the contribution margin income statement.) Sweet Pea sells four dozen plain donuts for every dozen custard-filled donuts. A dozen plain donuts sells for $4.00, with total variable cost of $1.60 per dozen. A dozen custard-filled donuts sells for $8.00, with total variable cost of $3.20 per dozen. Read the requirements Requirement 1. Calculate the weighted average contribution margin. (Round all currency amounts...
Please explain requirement 4 in great detail.
E3-36 (similar to) High End Beauty manufactures and sells a face cream to small specialty stores in the greater Los Angeles a Lopez understand High End Beauty's cost structure. (Click the icon to view the operating income statement.) Read the requirements. 1 Requirements 1. Recast the income statement to emphasize contribution margin. 2. Calculate the contribution margin percentage and breakeven point in units and revenues for June 2017 3. What is the margin...
The HighStep Shoe Company operates a chain of shoe stores that sell 10 different styles of inexpensive men's shoes with identical unit costs and selling prices. A unit is defined as a pair of shoes. Each store has a store manager who is paid a fixed salary. Individual salespeople receive a fixed salary and a sales commission. HighStep is considering opening another store that is expected to have the revenue and cost relationships shown here. (Click the icon to view...
Suppose Garrett Corp.'s breakeven point is revenues of $1,400,000. Fixed costs are $630,000 Requirements 1. Compute the contribution margin percentage. 2. Compute the selling price if variable costs are $11 per unit. 3. Suppose 90,000 units are sold. Compute the margin of safety in units and dollars. 4. What does this tell you about the risk of Garrett making a loss? What are the most likely reasons for this risk to increase? Requirement 1. Compute the contribution margin percentage Determine...
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