Question

Cukumber Corporation has collected the following information after its first year of sales Sales were $1,200,000 on 100,000 units, selling exec 5492.000, direct labor 121,000, administrative expenses 276,000 (20% and 80 d), and manufacturing overhead 354.000 (7 do a CVP analysis so that can make plans for the co v er the projected that it was will increase by 10 next year 210.000 de Compute (1) the contribution margin for the current year and the projected year, and (2) the fed costs for the current year(Assume that feed costs will remain the same in the projected year) ) (1) Contribution margin for current year Contribution margin for projected year (2) Fored Costs Compute the break-even point in units and sales dollars for the current yet. Break-even point in uns Break-even point in dollars The company has a target net income of $200,000. What is the required sales in dollars for the company to meet target Sales dollars required for target net income

Answer 1

Cullumbes coa podation Selling expense plect material Direct labor Admin Expense manufo overhead TOTCH variable $84000 S$ 492,000 21000 55200 247800 $ 900,000 fixed TOTG 126000 $ 210,000 492000 21000 220800 276000 106200 354000 4 53000 13 53 000 sales > $ 1, 200,000 onits 100,000 next year soles will increase by 100 Explanation contribution margin contribution margin for current years 300,000 for projected yeas 330,000 o Fixed cost $ 453000 2 contribution margin sales - vanable expense cusent year - 5 1,200000 - 9,00,000 = ls 300,000 pojected year ( 1 200,000 x 110%) - 1900,000 XILOY F1320,000 - 990000 - 339,000

& Breakeven points in units 151000 unit Breakeven points in dollars & 11,812.000 - Explanation. I c h pes unit: $300,000 - 100,000 unit of $3 P.OT Breakeven const - fixed expense - cm pes unit. $ 453.000 & $3. 151000 unit 2) em Ratio - $ 300,000 F 1,200,000 - IF 0 25 Breakeven (sales dollar) - fixed expense & cm Ratio F453 000 0.25 = 1,812,000

*soles dollax Requised ros togel net income 12.613,000 -cm Ratio - cm: sales. 300000 B 1,200,000 10.25 = sales doll as required for torget net income. fixed expenset Target net income cm Rato 6 2 612,000 $ 453000 + $ 200,000 0. 25 margin of safety ROHO 51% Achalsales - Breakeven ACRH sales $1,200,000 - $ 1,812000 . 1,200,000 Isiol