Ans 1) | Midland Inc. | ||||
Ratio | |||||
Amount | |||||
Sales=(A) | $ 20,00,000.00 | 100% | |||
Variable Expenses=(B) | $ 12,00,000.00 | 60.00% | |||
Contribution Margin=(C )=(A)-(B) | $ 8,00,000.00 | 40.00% | |||
Fixed Expenses=(D) | $ 10,10,000.00 | ||||
Net Operating Income=(C )-(D) | $ -2,10,000.00 | ||||
Contribution Margin=Sales-Variable Cost | |||||
Break even Point in dollars=Fixed Cost/Contribution Margin Ratio | |||||
Contribution Margin Ratio=(Contribution Margin/Sales)*100 | |||||
Fixed Cost=(A) | $ 10,10,000.00 | ||||
Contribution Margin Ratio=(B) | 40.00% | ||||
Break even Point=(A)/(B) | $ 25,25,000.00 | ||||
Ratio | |||||
Ans 2(a) | Change selling Price($2000000*1.20) | $ 24,00,000.00 | 100% | ||
Variable Expenses | $ 12,00,000.00 | $ 0.50 | |||
Contribution Margin | $ 12,00,000.00 | $ 0.50 | |||
Fixed Cost=(A) | $ 10,10,000.00 | ||||
Contribution Margin Ratio=(B) | $ 0.50 | ||||
Break even Point=(A)/(B) | $ 20,20,000.00 | ||||
b) | Change in Variable cost | ||||
Variable cost (Present) | $ 12,00,000.00 | ||||
Add: Commission($2000000*5%) | $ 1,00,000.00 | ||||
New Variable cost | $ 13,00,000.00 | ||||
Fixed Cost(Present) | $ 10,10,000.00 | ||||
Less: | $ -2,05,000.00 | ||||
Add: | $ 42,000.00 | ||||
New Fixed Cost | $ 8,47,000.00 | ||||
Ratio | |||||
Selling Price=(A) | $ 20,00,000.00 | 100.00% | |||
New Variable Expenses=(B) | $ 13,00,000.00 | 65.00% | |||
Contribution Margin=(A)-(B) | $ 7,00,000.00 | 35.00% | |||
Fixed Cost=(A) | $ 8,47,000.00 | ||||
Contribution Margin Ratio=(B) | 35.00% | ||||
Break even Point=(A)/(B) | $ 24,20,000.00 | ||||
c) | Total | Variable | Fixed | ||
Cost of goods sold(50:50) ratio variable and Fixed($1542000*50%) variable,($1542000*50%) Fixed | $ 15,42,000.00 | $ 7,71,000.00 | $ 7,71,000.00 | ||
Selling Expenses | $ 5,22,000.00 | $ 93,000.00 | $ 4,29,000.00 | ||
Administrative Expenses | $ 1,46,000.00 | $ 56,000.00 | $ 90,000.00 | ||
Total | $ 22,10,000.00 | $ 9,20,000.00 | $ 12,90,000.00 | ||
Net Loss | $ -2,10,000.00 | ||||
Ratio | |||||
Selling Price=(A) | $ 20,00,000.00 | 100.00% | |||
New Variable Expenses=(B) | $ 9,20,000.00 | 46.00% | |||
Contribution Margin=(A)-(B) | $ 10,80,000.00 | 54.00% | |||
Fixed Cost=(A) | $ 12,90,000.00 | ||||
Contribution Margin Ratio=(B) | 54.000% | ||||
Break even Point=(A)/(B) | $ 23,88,889 | ||||
Break even Point | |||||
1) | $ 20,20,000 | ||||
2) | $ 24,20,000 | ||||
3) | $ 23,88,889 | ||||
Current Attempt in Progress Midlands Inchadabad year in 2019. For the first time in its history...
Current Attempt in Progress Midlands Inc. had a bad year in 2019. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 78,000 units of product: net sales $1,560,000; total costs and expenses $1,795,200; and net loss $235,200. Costs and expenses consisted of the following. Total Variable Fixed Cost of goods sold $1,125,600 $633,000 $492,600 Selling expenses 522,600 90,000 432,600 Administrative expenses 147,000 57,000 90,000 $1,795,200 $780,000 $1,015,200...
Midlands Inc. had a bad year in 2019. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 75,000 units of product: net sales $1,500,000; total costs and expenses $1,750,200; and net loss $250,200. Costs and expenses consisted of the following Cost of goods sold Selling expenses Administrative expenses Total Variable Fixed $1,080,000 $600,000 $480,000 520,200 95,000 425,200 150,000 55,000 95.000 $1.750,200 $750,000 $1.000.200 Management is considering the...
Midlands Inc. had a bad year in 2019. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 75,000 units of product: net sales $1,500,000; total costs and expenses $1.780.200; and net loss $280,200. Costs and expenses consisted of the following Total Variable Fixed Cost of goods sold Selling expenses $1,106,000 $598,000 $508,000 522,200 95,000 427,200 152,000 57,000 95,000 $1,780,200 $750,000 $1,030,200 Administrative expenses Management is considering the...
Midlands Inc. had a bad year in 2019. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 75,000 units of product: net sales $ 1,500,000; total costs and expenses $ 1,900,000; and net loss $400,000. Costs and expenses consisted of the following. Total Variable Fixed 1,240,000 $755,000 $485,000 515,000 90,000 425,000 Administrative expenses 145,000 55,000 90,000 $1,900,000 $900,000 $1,000,000 Cost of goods sold Selling expenses Management is...
Midlands Inc. had a bad year in 2019. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 79,000 units of product: net sales $1,580,000; total costs and expenses $1,968,240; and net loss $388,240. Costs and expenses consisted of the following: Total Variable $1,307,600 $796,000 512,640 94,000 Fixed $511,600 Cost of goods sold Selling expenses 418,640 Administrative expenses 148,000 $1,968.240 58,000 90,000 $948,000 $1,020,240 Management is considering the...
Midlands Inc. had a bad year in 2019. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 79,000 units of product: net sales $1,975,000; total costs and expenses $1,997,300; and net loss $22,300. Costs and expenses consisted of the following. Cost of goods sold Selling expenses Total Variable Fixed $1,345,250 $840,500 $504,750 506,050 91,000 415,050 146,000 56,000 90,000 $1,997,300 $987,500 $1,009,800 Administrative expenses Management is considering the...
Midlands Inc. had a bad year in 2019. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 78,000 units of product: net sales $1,560,000; total costs and expenses $1,935,960; and net loss $375,960. Costs and expenses consisted of the following Cost of goods sold Selling expenses Total $1,258,000 524,960 153,000 $1,935,960 Variable Fixed $785,000 $473,000 93.000 431.960 58,000 95,000 $936,000 $999,960 Administrative expenses Management is considering the...
Midlands Inc. had a bad year in 2019. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 79,000 units of product: net sales $1,975,000; total costs and expenses $1,997,300; and net loss $22,300. Costs and expenses consisted of the following. Total Variable Fixed Cost of goods sold Selling expenses $1,345,250 $840,500 $504,750 506,050 91,000 415,050 146,000 56,000 90,000 $1,997,300 $987,500 $1,009,800 Administrative expenses Management is considering the...
Midlands Inc. had a bad year in 2019. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 78,000 units of product: net sales $1,560,000; total costs and expenses $1,785,000; and net loss $225,000. Costs and expenses consisted of the following: Cost of goods sold Selling expenses Administrative expenses Total Variable Fixed $1,121,600 $631,000 $490,600 511,400 92,000 419,400 152,000 57,000 95.000 $1,785,000 $780,000 $1,005,000 Management is considering the...