AS PER HOMEWORKLIB POLICY I'VE ANSWERED THE FIRST 4 PARTS OF THE QUESTION.KINDLY POST THE SAME QUESTION ONCE AGAIN ASKING TO SOLVE THE REMAINING PORTION.
ANY DOUBTS OR CORRECTIONS?
FEEL FREE TO COMMENT BELOW
Req#1 | |||||||
CM Ratio | 40.00% | ||||||
Unit Sales to break even | 37500 | ||||||
Degree of operating leverate | 2.67 | ||||||
CM ratio = contribution /sales | |||||||
600000/1,500,000 | |||||||
40.00% | |||||||
BEP(units) = fixed cost/contribution margin per unit* | |||||||
BEP=375000/10 |
*Contribution Margin Per Unit =Selling Price - Variable cost per unit =25-15 =10 |
||||||
37500 | |||||||
Degree of operating leverage = contribution/net income | |||||||
600,000/225000 | |||||||
2.67 | |||||||
Req#2 | CM Ratio | 28.00% | |||||
Unit Sales to break even | 53571 | ||||||
CM ratio = contribution /sales | |||||||
(10-3)/25 | |||||||
28.00% | |||||||
BEP(units) = fixed cost/contribution margin per unit | |||||||
375000/7 | |||||||
53571 | |||||||
Req 3 | |||||||
Number of balls | 85714 | ||||||
Desired sales (units) =( fixed cost+ Desired income)/contribution margin per unit | |||||||
(375000+225000)/7 | |||||||
85714 | |||||||
Req 4 | New selling price=30 | ||||||
CM ratio = 40% | |||||||
selling price per unit be x | |||||||
variable cost per unit is 18 | |||||||
so selling price should be = | |||||||
CM ratio =(selling price - variable cost) /Selling Price | |||||||
40%= (x-18)/x | |||||||
0.40x = x -18 | |||||||
x =18/0.6 | |||||||
x = 30 | |||||||
Check my work Northwood Company manufactures basketballs. The company has a ball that sells for $25....
Check my work 3 Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost. 35 points Last year, the company sold 46,000 of these balls, with the following results: eBook Sales (46,00 balls) Variable expenses Contribution margin Fixed expenses Net operating income $ 1,150,000...
Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost. Last year, the company sold 40,000 of these balls, with the following results: Sales (40,000 balls) Variable expenses Contribution margin Fixed expenses Net operating income $1,000,000 600,000 400.000 265,000 $ 135,000 Required: 1. Compute...
Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost. Last year, the company sold 44,000 of these balls, with the following results: Sales (44,000 balls) Variable expenses Contribution margin Fixed expenses Net operating income $ 1,100,000 660,000 440,000 317,000 $ 123,000 Required: 1....
Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost. Last year, the company sold 52,000 of these balls, with the following results: Sales (52,000 balls) Variable expenses Contribution margin Fixed expenses Net operating income $ 1,300,000 780,000 520,000 321,000 $ 199,000 Required: 1....
Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost. Last year, the company sold 30,000 of these balls, with the following results: $ Sales (30,000 balls) Variable expenses Contribution margin Fixed expenses Net operating income 750,000 450.000 300,000 210,000 90,000 Required: 1. Compute...
Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is dir labor cost Last year, the company sold 46,000 of these balls, with the following results: Sales (46,000 balls) Variable expenses Contribution margin Fixed expenses Net operating income $ 1,150,000 690,000 460,000 318,000 $ 142,000 Required: 1....
Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost. Last year, the company sold 44,000 of these balls, with the following results: Sales (44,000 balls) Variable expenses Contribution margin Fixed expenses Net operating income $ 1,100,000 660,000 440,000 317,000 $ 123,000 Required: 1....
Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost. Last year, the company sold 34,000 of these balls, with the following results: $ Sales (34,000 balls) Variable expenses Contribution margin Fixed expenses Net operating income 850,000 510,000 340,000 212,000 128,000 $ Required: 1....
Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15 per ball, of which 60% is direct labor cost Last year, the company sold 30,000 of these balls, with the following results: Sales (30,000 balls) Variable expenses Contribution margin Fixed expenses Net operating income $750,000 450,000 300,000 210,000 $ 90,000 Required: 1. Compute...
Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost. Last year, the company sold 40,000 of these balls, with the following results: Sales (40,000 balls) Variable expenses Contribution margin Fixed expenses Net operating income $1,000,000 600,000 400,000 265,000 $ 135,000 Required: 1. Compute...