Homework Answers
| Part-1 |
| Degree of Operating Leverage= Contribution Margin/ Net Income |
| =78090/13700 = $5.7 |
| Part-2 |
| Total Contribution margin Increase = Increase in UnitX Contribution margin per Unit |
| 150 Unit X $25= $3750 |
| Part-3 |
| Break Even will be :- Decrease due to increase in Contribution margin per Unit |
| Part-4 |
| Break Even will be :- Increase due to decrease in Contribution margin per Unit |
| Part-5 : Estimate Costs |
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Explanation not necessary If a firm has a contribution margin of $78,090 and a net income...
If the sales mix results in a lower contribution margin percentage, the break even point a....
If the sales mix results in a lower contribution margin percentage, the break even point a. increases b. decreases c. unchanged d. there is no relationship between contribution margin and sales mix strategy
9-12 If the selling price of an item increases, while all other costs are held constant,...
9-12
If the selling price of an item increases, while all other costs are held constant, the break-even point in units will: a. increase b. decrease c. remain unchanged d. depend on the original sales price 10. After all variable costs have been deducted from sales, the amount that is available to go toward covering fixed costs and ultimately, profits, is called: a. net sales b. gross profit C. gross margin d. contribution margin The level of sales necessary to...
Abensan Company sells a single product. If both the selling price and variable cost per unit...
Abensan Company sells a single product. If both the selling price and variable cost per unit increase by 5% and fixed costs remain steady, then contribution margin per unit and break- even point in units will, respectively, decrease and increase. increase and remain unchanged. decrease and remain unchanged. O increase and decrease.
Hudson Co. reports the contribution margin income statement for 2015. HUDSON CO. Contribution Margin Income Statement...
Hudson Co. reports the contribution margin income statement for 2015. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2015 Sales (10.200 units at $225 each) Variable costs (10,200 units at $185 each) $ 2.295.000 1,887,000 $ Contribution margin Fixed costs 408,000 279,500 Pretax income $ 128,500 If the company raises its selling price to $250 per unit. 1. Compute Hudson Co.'s contribution margin per unit. Contribution margin per unit 2. Compute Hudson Co.'s contribution margin ratio. Contribution...
Problem 3-17A (Algo) Determining the break-even point and preparing a contribution margin income statement LO 3-1...
Problem 3-17A (Algo) Determining the break-even point and preparing a contribution margin income statement LO 3-1 Ritchie Manufacturing Company makes a product that it sells for $130 per unit. The company incurs variable manufacturing costs of $66 per unit. Variable selling expenses are $12 per unit, annual fixed manufacturing costs are $450,000, and fixed selling and administrative costs are $226,000 per year. Required Determine the break-even point in units and dollars using each of the following approaches: a. Use the...
Determine contribution margin ratio, break-even point in dollars, and margin of safety (LO 3, 4, 5),...
Determine contribution margin ratio, break-even point in dollars, and margin of safety (LO 3, 4, 5), AP ES-17 Felde Bucket Co., a manufacturer of rain barrels, had the following data for 2016: Sales Sales price Variable costs Fixed costs 2,500 units $40 per unit $24 per unit $19,500 Instructions (a) What is the contribution margin ratio? (b) What is the break-even point in dollars? (c) What is the margin of safety in dollars and as a ratio? (d) If the...
A contribution margin income statement organizes costs by behavior
Contribution Margin Income StatementA contribution margin income statement organizes costs by behavior (variable or fixed), rather than by function (operating, selling, or administrative). The contribution margin is the difference between sales and variable expenses .Byron Manufacturing has one product that sells for $24.00 per unit. The company estimates fixed costs at $6,000, direct materials at $4.00 per unit, direct labor at $5.00 per unit, and variable overhead costs at $3.00 per unit.Fill in the contribution margin income statement when 730...
[The following information applies to the questions displayed below.] Hudson Co. reports the contribution margin income...
[The following information applies to the questions
displayed below.]
Hudson Co. reports the contribution margin income statement for
2017.
HUDSON CO.
Contribution Margin Income Statement
For Year Ended December 31, 2017
Sales (9,900 units at $225 each)
$
2,227,500
Variable costs (9,900 units at $180 each)
1,782,000
Contribution margin
$
445,500
Fixed costs
342,000
Pretax income
$
103,500
2 ! Part 1 of 5 Required information Use the following information for the Exercises below. [The following information applies to the...
Problem 3-17A (Algo) Determining the break-even point and preparing a contribution margin income statement LO 3-1...
Problem 3-17A (Algo) Determining the break-even point and preparing a contribution margin income statement LO 3-1 Ritchie Manufacturing Company makes a product that it sells for $200 per unit. The company incurs variable manufacturing costs of $101 per unit. Variable selling expenses are $19 per unit, annual fixed manufacturing costs are $464,000, and fixed selling and administrative costs are $256,000 per year. Required Determine the break-even point in units and dollars using each of the following approaches: a. Use the...
Required information Problem 18-6A Analysis of price, cost, and volume changes for contribution margin and net...
Required information Problem 18-6A Analysis of price, cost, and volume changes for contribution margin and net income LO P2, A1 (The following information applies to the questions displayed below.) This year Burchard Company sold 40,000 units of its only product for $17.00 per unit. Manufacturing and selling the product required $125,000 of fixed manufacturing costs and $185,000 of fixed selling and administrative costs. Its per unit variable costs follow $ 4.50 3.50 Material Direct labor (paid on the basis of...
9-12
If the selling price of an item increases, while all other costs are held constant, the break-even point in units will: a. increase b. decrease c. remain unchanged d. depend on the original sales price 10. After all variable costs have been deducted from sales, the amount that is available to go toward covering fixed costs and ultimately, profits, is called: a. net sales b. gross profit C. gross margin d. contribution margin The level of sales necessary to...
Abensan Company sells a single product. If both the selling price and variable cost per unit increase by 5% and fixed costs remain steady, then contribution margin per unit and break- even point in units will, respectively, decrease and increase. increase and remain unchanged. decrease and remain unchanged. O increase and decrease.
Hudson Co. reports the contribution margin income statement for 2015. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2015 Sales (10.200 units at $225 each) Variable costs (10,200 units at $185 each) $ 2.295.000 1,887,000 $ Contribution margin Fixed costs 408,000 279,500 Pretax income $ 128,500 If the company raises its selling price to $250 per unit. 1. Compute Hudson Co.'s contribution margin per unit. Contribution margin per unit 2. Compute Hudson Co.'s contribution margin ratio. Contribution...
Problem 3-17A (Algo) Determining the break-even point and preparing a contribution margin income statement LO 3-1 Ritchie Manufacturing Company makes a product that it sells for $130 per unit. The company incurs variable manufacturing costs of $66 per unit. Variable selling expenses are $12 per unit, annual fixed manufacturing costs are $450,000, and fixed selling and administrative costs are $226,000 per year. Required Determine the break-even point in units and dollars using each of the following approaches: a. Use the...
Determine contribution margin ratio, break-even point in dollars, and margin of safety (LO 3, 4, 5), AP ES-17 Felde Bucket Co., a manufacturer of rain barrels, had the following data for 2016: Sales Sales price Variable costs Fixed costs 2,500 units $40 per unit $24 per unit $19,500 Instructions (a) What is the contribution margin ratio? (b) What is the break-even point in dollars? (c) What is the margin of safety in dollars and as a ratio? (d) If the...
[The following information applies to the questions
displayed below.]
Hudson Co. reports the contribution margin income statement for
2017.
HUDSON CO.
Contribution Margin Income Statement
For Year Ended December 31, 2017
Sales (9,900 units at $225 each)
$
2,227,500
Variable costs (9,900 units at $180 each)
1,782,000
Contribution margin
$
445,500
Fixed costs
342,000
Pretax income
$
103,500
2 ! Part 1 of 5 Required information Use the following information for the Exercises below. [The following information applies to the...
Problem 3-17A (Algo) Determining the break-even point and preparing a contribution margin income statement LO 3-1 Ritchie Manufacturing Company makes a product that it sells for $200 per unit. The company incurs variable manufacturing costs of $101 per unit. Variable selling expenses are $19 per unit, annual fixed manufacturing costs are $464,000, and fixed selling and administrative costs are $256,000 per year. Required Determine the break-even point in units and dollars using each of the following approaches: a. Use the...
Required information Problem 18-6A Analysis of price, cost, and volume changes for contribution margin and net income LO P2, A1 (The following information applies to the questions displayed below.) This year Burchard Company sold 40,000 units of its only product for $17.00 per unit. Manufacturing and selling the product required $125,000 of fixed manufacturing costs and $185,000 of fixed selling and administrative costs. Its per unit variable costs follow $ 4.50 3.50 Material Direct labor (paid on the basis of...
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