Assume that a company has forecasted 5,800 units sold, has an average selling price of $25.00...
Assume that a company has forecasted 5,800 units sold, has an average selling price of $25.00 per unit, unit variable cost of $10.00 per unit, and a total fixed cost equal to $84,000. Using the template provided, perform the following analyses:
a. Create a Contribution-format Income Statement based on the forecasted data
b. Create a Contribution-format Income Statement based on the Break-even Sales Volume
c. Create a Contribution-format Income Statement based on a target profit equal to $6,000
| INCOME STATEMENTS | ||||||||||||
| Forecast | Break-even | Target Profit | ||||||||||
| Total | Per Unit | % | Total | Per Unit | % | Total | Per Unit | % | ||||
| Number of units sold | ||||||||||||
| Price/Revenues | ||||||||||||
| Variable Cost | ||||||||||||
| Contribution Margin | ||||||||||||
| Total Fixed Cost | ||||||||||||
| Operating Profit | ||||||||||||
| Operating Profit % | ||||||||||||
Homework Answers
| Income Statement | |||||
| FORECAST data | |||||
| Amnt($) | Amnt($) | per unit | |||
| Number of Units Sold | 5,800 | ||||
| Average selling Price $25/ unit | 5800*25 | ||||
| Revenue | 5800*25 | 1,45,000 | 25 | ($145000/5800) | |
| Less | |||||
| Variable cost $10/ unit | 5800*10 | 58,000 | 10 | ($58000/5800) | |
| Contribution Margin | 87,000 | 15 | ($87000/5800) | ||
| Contribution Margin % | (87000/145000) | 60% | |||
| Less | |||||
| Total Fixed cost | 84,000 | ||||
| Operating profit | 3,000 | ||||
| Operating profit % | (3000/145000) | 2% | |||
| Breakeven Point in Unit Sales ( Volume) | |||||
| Total Fixed cost/Contribution margin per unit | |||||
| Total Fixed cost $ | 84,000 | ||||
| Contribution margin per unit( as above)-$/Unit | 15 | ||||
| Number of Units | (84000/15) | 5,600 |
| BREAK EVEN BASIS | |||||
| Amnt($) | Amnt($) | per unit | |||
| Number of Units Sold | 5,600 | ||||
| Average selling Price $25/ unit | 5600*25 | ||||
| Revenue | 5600*25 | 1,40,000 | 25 | ($140000/5600) | |
| Less | |||||
| Variable cost $10/ unit | 5600*10 | 56,000 | 10 | ($56000/5600) | |
| Contribution Margin | 84,000 | 15 | ($84000/5600) | ||
| Contribution Margin % | (84000/140000) | 60% | |||
| Less | |||||
| Total Fixed cost | 84,000 | ||||
| Operating profit ( Break even ) | - | ||||
| Operating profit % | 0% |
| Create a Contribution-format Income Statement based on a target profit equal to $6,000 | ||||||
| Total Fixed cost $ | 84,000 | |||||
| Target Profit $ | 6000 | |||||
| Contribution $-A | 90,000 | |||||
| Revenue $/ unit | 25 | |||||
| Variable cost $/ unit | 10 | |||||
| Contribution $/ unit-B | 15 | |||||
| Number of Unit (A/B) | 6,000 | |||||
| Income Statement | ||||||
| Amnt($) | Amnt($) | per unit | ||||
| Number of Units Sold | 6,000 | |||||
| Average selling Price $25/ unit | 6000*25 | |||||
| Revenue | 6000*25 | 1,50,000 | 25 | ($150000/6000) | ||
| Less | ||||||
| Variable cost $10/ unit | 6000*10 | 60,000 | 10 | ($60000/6000) | ||
| Contribution Margin | 90,000 | 15 | ($90000/6000) | |||
| Contribution Margin % | (90000/150000) | 60% | ||||
| Less | ||||||
| Total Fixed cost | 84,000 | |||||
| Operating profit | 6,000 | |||||
| Operating profit % | (6000/150000) | 4% | ||||
Add Answer to:
Assume that a company has forecasted 5,800 units sold, has an
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