Techtronics Software, Inc. specializes in customized spreadsheet software. The results of the company’s operations during the...
Techtronics Software, Inc. specializes in customized spreadsheet software. The results of the company’s operations during the prior year (20xx) are given in the following table. All units produced during the year were sold. (Ignore income taxes.)
|
Sales revenue |
$ 3,000,000 |
|
|
Manufacturing costs: |
||
|
Fixed |
500,000 |
|
|
Variable |
1,000,000 |
|
|
Selling costs: |
||
|
Fixed |
50,000 |
|
|
Variable |
100,000 |
|
|
Administrative costs: |
||
|
Fixed |
120,000 |
|
|
Variable |
30,000 |
Required:
- Prepare a traditional income statement and a contribution income statement for the company.
- What is the firm’s operating leverage for the sales volume generated during the prior year?
- Suppose sales revenue increases by 20 percent. What will be the percentage increase in net income?
- Which income statement would an operating manager use to answer requirement (3)? Why?
Homework Answers
The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and calculation. For detailed answer refer to the supporting sheet.
Add Answer to:
Techtronics Software, Inc. specializes in customized spreadsheet
software. The results of the company’s operations during the...
echtronics Software, Inc. specializes in customized spreadsheet software. The results of the company's operations during the...
echtronics Software, Inc. specializes in customized spreadsheet software. The results of the company's operations during the prior year (20xx) are given in the following table. All units produced during the year were sold. (Ignore income taxes.) Sales revenue Manufacturing costst Fixed Variable Selling costs: Fixed Variable Administrative costs Fixed Variable $3,200,000 510,000 1,020,000 52,000 110,000 122,000 32,000 Required 1-a. Prepare a traditional income statement for the company 1-b. Prepare a contribution income statement for the company. 2. What is the...
Europa Publications, Inc. specializes in reference books that keep abreast of the rapidly changing political and...
Europa Publications, Inc. specializes in reference books that keep abreast of the rapidly changing political and economic issues in Europe. The results of the company’s operations during the prior year are given in the following table. All units produced during the year were sold. (Ignore income taxes.) Sales revenue $ 1,950,000 Manufacturing costs: Fixed 562,000 Variable 967,000 Selling costs: Fixed 39,000 Variable 69,000 Administrative costs: Fixed 79,000 Variable 34,000 Required: 1-a. Prepare a traditional income statement for the company. 1-b....
Europa Publications, Inc. specializes in reference books that keep abreast of the rapidly changing political and...
Europa Publications, Inc. specializes in reference books that keep abreast of the rapidly changing political and economic issues in Europe. The results of the company's operations during the prior year are given in the following table. All units produced during the year were sold. (Ignore income taxes.) Sales revenue $1,650,000 Manufacturing costs: Fixed 461,000 Variable 857,000 Selling costs: Fixed 33,000 Variable 63,000 Administrative costs: Fixed 73,000 Variable 28,000 Required: 1-a. Prepare a traditional income statement for the company. 1-b. Prepare...
8. JAG Corp. sells software during the recruiting seasons. During the current year, 11,000 software units...
8. JAG Corp. sells software during the recruiting seasons. During the current year, 11,000 software units were sold resulting in $440,000 of sales revenue, $110,000 of variable costs, and $48,000 of fixed costs. If sales increase by $60,000, operating income will increase by a. $40,000 b. $45,000 c. $60,000 d. $80,000
Middleton Associates is a consulting firm that specializes in information systems for construction and landscaping companies....
Middleton Associates is a consulting firm that specializes in information systems for construction and landscaping companies. The firm has two offices—one in Toronto and one in Vancouver. The firm classifies the direct costs of consulting jobs as variable costs. A segmented contribution format income statement for the company’s most recent year is given below: Office Total Company Toronto Vancouver Sales $ 1,000,000 100.00 % $ 300,000 100 % $ 700,000 100 % Variable expenses 490,000 49.00 105,000 35 385,000 55...
Westerville Company reported the following results from last year’s operations: Sales $ 1,500,000 Variable expenses 500,000...
Westerville Company reported the following results from last year’s operations: Sales $ 1,500,000 Variable expenses 500,000 Contribution margin 1,000,000 Fixed expenses 700,000 Net operating income $ 300,000 Average operating assets $ 1,000,000 At the beginning of this year, the company has a $200,000 investment opportunity with the following cost and revenue characteristics: Sales $ 300,000 Contribution margin ratio 60 % of sales Fixed expenses $ 132,000 The company’s minimum required rate of return is 10%. 13. If the company pursues...
Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed...
Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses Net operating income Average operating assets $ 1,000,000 300,000 700,000 500,000 200,000 $ 625,000 At the beginning of this year, the company has a $120,000 investment opportunity with the following cost and re characteristics: Sales Contribution margin ratio Fixed expenses $ 200,000 60 of sales $ 90,000 The company's minimum required rate of return is 15%. Foundational 10-11 11. What is last year's...
The CVP income statements shown below are available for Armstrong Company and Contador Company. Contador Co....
The CVP income statements shown below are available for Armstrong Company and Contador Company. Contador Co. Sales Variable costs Contribution margin Fixed costs Net income Armstrong Co. $500,000 240,000 260,000 160,000 $100,000 $500,000 50,000 450,000 350,000 $100,000 Degree of operating leverage for each company is as follows: Degree of Operating Leverage 2.6 4.5 Armstrong Contador Assuming that sales revenue increases by 10%, the variable costing income statement for each company is as follows: Sales Revenue Variable Costs Contribution Margin Fixed...
Westerville Company reported the following results from last year’s operations: Sales $ 1,000,000 Variable expenses 300,000...
Westerville Company reported the following results from last year’s operations: Sales $ 1,000,000 Variable expenses 300,000 Contribution margin 700,000 Fixed expenses 500,000 Net operating income $ 200,000 Average operating assets $ 625,000 At the beginning of this year, the company has a $120,000 investment opportunity with the following cost and revenue characteristics: Sales $ 200,000 Contribution margin ratio 60 % of sales Fixed expenses $ 90,000 The company’s minimum required rate of return is 15%. Questions： 4. What is...
Friendly Company’s financial statement for the last month is below. sales 150,000 less: variable costs 30,000...
Friendly Company’s financial statement for the last month is below. sales 150,000 less: variable costs 30,000 contribution margin 120,000 less; fixed costs 90,000 operating income 30,000 Required: Calculate the company’s Degree of Operating Leverage. Using the Degree of Operating Leverage that you have calculated for part 1, calculate an estimate of a new Net Operating Income, if sales increase by 25%. Given the solutions above, comment on this company if its industry has an average DOL of 6.0.
echtronics Software, Inc. specializes in customized spreadsheet software. The results of the company's operations during the prior year (20xx) are given in the following table. All units produced during the year were sold. (Ignore income taxes.) Sales revenue Manufacturing costst Fixed Variable Selling costs: Fixed Variable Administrative costs Fixed Variable $3,200,000 510,000 1,020,000 52,000 110,000 122,000 32,000 Required 1-a. Prepare a traditional income statement for the company 1-b. Prepare a contribution income statement for the company. 2. What is the...
Europa Publications, Inc. specializes in reference books that keep abreast of the rapidly changing political and economic issues in Europe. The results of the company's operations during the prior year are given in the following table. All units produced during the year were sold. (Ignore income taxes.) Sales revenue $1,650,000 Manufacturing costs: Fixed 461,000 Variable 857,000 Selling costs: Fixed 33,000 Variable 63,000 Administrative costs: Fixed 73,000 Variable 28,000 Required: 1-a. Prepare a traditional income statement for the company. 1-b. Prepare...
8. JAG Corp. sells software during the recruiting seasons. During the current year, 11,000 software units were sold resulting in $440,000 of sales revenue, $110,000 of variable costs, and $48,000 of fixed costs. If sales increase by $60,000, operating income will increase by a. $40,000 b. $45,000 c. $60,000 d. $80,000
Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses Net operating income Average operating assets $ 1,000,000 300,000 700,000 500,000 200,000 $ 625,000 At the beginning of this year, the company has a $120,000 investment opportunity with the following cost and re characteristics: Sales Contribution margin ratio Fixed expenses $ 200,000 60 of sales $ 90,000 The company's minimum required rate of return is 15%. Foundational 10-11 11. What is last year's...
The CVP income statements shown below are available for Armstrong Company and Contador Company. Contador Co. Sales Variable costs Contribution margin Fixed costs Net income Armstrong Co. $500,000 240,000 260,000 160,000 $100,000 $500,000 50,000 450,000 350,000 $100,000 Degree of operating leverage for each company is as follows: Degree of Operating Leverage 2.6 4.5 Armstrong Contador Assuming that sales revenue increases by 10%, the variable costing income statement for each company is as follows: Sales Revenue Variable Costs Contribution Margin Fixed...
Most questions answered within 3 hours.
-
1-Write an algorithm to get two numbers from the user (as
inputs) and calculate the sum...
asked 54 minutes ago -
Define white-collar crime. What is the difference between
offender and offense-based definitions of white-collar crime? What...
asked 1 hour ago -
Consider a reaction which is 1st order with respect to A and 1st
order with respect...
asked 1 hour ago -
c++
The length of the hypotenuse of a right-angled triangle is the
square root of the...
asked 1 hour ago -
When a metal rod is heated, not only its resistance but also its
length and cross‐sectional...
asked 1 hour ago -
write a c++ program that computes the L^1 - Norm of a given
vector (L^1 norm...
asked 2 hours ago -
A manufacturer of banana chips would like to know whether its
bag filling machine works correctly...
asked 2 hours ago -
Complete the chapter case, "Turnover Analysis".
Chapter Case
Turnover Analysis
You recently completed your company’s new...
asked 2 hours ago -
What is the pH of solutions having the following H3O+
concentrations? Identify each as acidic, basic,...
asked 2 hours ago -
How does over-voltage of the diode usually occur?
asked 2 hours ago -
If you step on a dirty nail, your doctor will recommend you
update your Tetanus vaccination....
asked 2 hours ago -
Suppose that decreases in the price of milk lead to decrease s
in the retail prices...
asked 2 hours ago