1 | ||
CM Ratio | =Contribution/sales | |
=195000/390000 | 50% | |
BEP (Units) | =Fixed Cost/CM p.u | |
=217500/15 | 14500 | |
BEP (Sales) | =Fixed Cost/CM Ratio | |
=217500/50% | $4,35,000 |
2. Increase/Decrease in Net Operating Income | ||
Sales | $4,71,000 | =390000+81000 |
Variable Expense | $2,35,500 | =471000*50% |
Contribution | $2,35,500 | =471000*50% |
Fixed Expenses | $2,23,700 | =217500+6200 |
Net Operating Income | $11,800 | |
Current Net Operating Loss | -$22,500 | |
Increase in Net Operating Income | $34,300 | =11800+22500 |
3. Revised Net Operating Income/Loss | ||
Sales (26000 units * $27 p.u) | $7,02,000 | =(13000*2)*(30*90%) |
Variable Expense | $3,90,000 | =26000*15 |
Contribution | $3,12,000 | |
Fixed Expenses | $2,49,500 | =217500+32000 |
Net Operating Income | $62,500 |
4. Units to be sold | ||
Selling Price p.u | $30 | |
Variable expense p.u | $15.5 | =15+0.5 |
Contribution p.u | $14.5 | |
Fixed Cost | $2,17,500 | |
Target Profit | $4,300 | |
Total | $2,21,800 | |
Units to be sold | ||
=Fixed Cost+Target Profit/Contribution p.u | ||
=221800/14.5 | ||
15297 |
5 (a) | ||
CM Ratio | =Contribution/sales | |
=(30-(15-3))/30 | 60% | |
BEP (Units) | =Fixed Cost/CM p.u | |
=(217500+52000)/12 | 22458 | |
BEP (Sales) | =Fixed Cost/CM Ratio | |
=(217500+52000)/60% | $4,49,167 |
5 (b) | ||
Automated | Not Automated | |
Sales (20600*$30 p.u) | $6,18,000 | $6,18,000 |
-Variable Expense ($12 & $15 p.u) | $2,47,200 | $3,09,000 |
Contribution Margin | $3,70,800 | $3,09,000 |
-Fixed Expense | $2,69,500 | $2,17,500 |
Net Income | $1,01,300 | $91,500 |
5 (c ) | ||
The company is recommended to Automate it's operations as Net income increases by automation. |
Due to erratic sales of its sole product-a high-capacity battery for laptop computers.PEM, Inc., has been...
Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Inc., has been experiencing financial difficulty for some time. The company's contribution format income statement for the most recent month is given below: Sales (12,600 units X $30 per unit) Variable expenses Contribution margin Fixed expenses Net operating loss $ 378,000 226,800 151,200 169,200 $ (18,000) Required: 1. Compute the company's CM ratio and its break-even point in unit sales and dollar sales. 2. The president believes...
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Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Inc., has been experiencing financial difficulty for some time. The company's contribution format income statement for the most recent month is given below: Sales (13,000 units * $30 per unit) Variable expenses Contribution margin Fixed expenses Net operating loss $ 390,000 195,000 195,000 217.500 $ (22,500) Required: 1. Compute the company's CM ratio and its break-even point in unit sales and dollar sales. 2. The president...
Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Inc., has been experiencing financial difficulty for some time. The company's contribution format income statement for the most recent month is given below. points 100.000 eBook Sales (13,000 units X $30 per unit) Variable expenses Contribution margin Fixed expenses Net operating loss 195,000 195,000 217.500 $(22.500) Print Reference Required: 1 Compute the company's CM ratio and its break-even point in unit sales and dollar sales. 2. The...
Due to erratic sales of its sole product—a high-capacity battery for laptop computers—PEM, Inc., has been experiencing financial difficulty for some time. The company’s contribution format income statement for the most recent month is given below: Sales (13,300 units × $30 per unit) $ 399,000 Variable expenses 239,400 Contribution margin 159,600 Fixed expenses 177,600 Net operating loss $ (18,000 ) Required: 1. Compute the company’s CM ratio and its break-even point in unit sales and dollar sales. 2. The...
Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Inc., has been experiencing financial difficulty for some time. The company's contribution format income statement for the most recent month is given below. Sales (12,800 units $30 per unit) Variable expenses Contribution margin Fixed expenses Net operating loss $ 384,000 192,000 192,000 214,500 $ (22,500) Required: 1. Compute the company's CM ratio and its break even point in unit sales and dollar sales. 2. The president believes...
Due to erratic sales of its sole product-a high-capacity battery for laptop computers—PEM, Inc., has been experiencing financial difficulty for some time. The company's contribution format income statement for the most recent month is given below: Sales (13,300 units * $30 per unit) Variable expenses Contribution margin Fixed expenses Net operating loss $ 399,000 199,500 199,500 222,000 $ (22,500) Required: 1. Compute the company's CM ratio and its break-even point in unit sales and dollar sales. 2. The president believes...
Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Inc., has been experiencing financial difficulty for some time. The company's contribution format income statement for the most recent month is given below: Sales (12,800 units * $20 per unit) Variable expenses Contribution margin Fixed expenses Net operating loss $ 256,000 153,600 102,400 114,400 $ (12,000) Required: 1. Compute the company's CM ratio and its break-even point in unit sales and dollar sales. 2. The president believes...
Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Inc., has been experiencing financial difficulty for some time. The company's contribution format income statement for the most recent month is given below: Sales (13,100 units X $20 per unit) Variable expenses Contribution margin Fixed expenses Net operating loss $ 262,000 131,000 131,000 146,000 $ (15,000) Required: 1. Compute the company's CM ratio and its break-even point in unit sales and dollar sales. 2. The president believes...
Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Inc., has been experiencing financial difficulty for some time. The company's contribution format income statement for the most recent month is given below: Sales (12,700 units X $30 per unit) Variable expenses Contribution margin Fixed expenses Net operating loss $ 381,000 228,600 152,400 170,400 $ (18,000) Required: 1. Compute the company's CM ratio and its break-even point in unit sales and dollar sales. 2. The president believes...
Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Inc., has been experiencing financial difficulty for some time. The company's contribution format income statement for the most recent month is given below: Sales (13,000 units X $30 per unit) Variable expenses Contribution margin Fixed expenses Net operating loss $ 390,000 234,000 156,000 174,000 $ (18,000) Required: 1. Compute the company's CM ratio and its break-even point in unit sales and dollar sales. 2. The president believes...