Question




Northwood Company manufactures basketballs. The company has a ball that sells for $25 At present, the ball is manufactured in
complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req3 Reg 4 Reg 5 Reg 6 Reg 6B Compute (a) last
Reg 1 Reg 2 Req3 Reg 4 Reg 5 Req 6A Req 6B Due to an increase in labor rates, the company estimates that next years variable
In sens 42,000 balls (the same number as sold year). Prepare a contribution format income statement and compute the degree of
Reg 1 Reg 2 Reg 3 Reg 4 Req Reg 6 Reg 63 Refer again to the data in (2) above. The president feels that the company must rais
w this question by entering your answers in the tabs below. Req 1 Req 2 Reg 3 Reg 4 Reg 5 Reg 6 Reg 6B Refer to the original
Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reg Req 6A Reg 6B If the new plant
ILLUM YUUl 15WISH LUS UW. Reg 1 Reg 2 Req3 Reg 4 Reg 5 Reg 6 Reg 6B Assume the new plant is built and that next year the comp
0 0
Add a comment Improve this question Transcribed image text
Answer #1
Please give positive ratings so I can keep answering. It would help me a lot. Please comment if you have any query. Thanks!
Northwood Company
Answer 1
Contribution margin income statement
Particulars Amount $ Per Unit $ Note
Units         42,000.00 E
Sales    1,050,000.00                   25.00 A
Variable Expenses       630,000.00                   15.00 B
Contribution margin       420,000.00                   10.00 C=A-B
Contribution margin % 40.00% D=C/A
Fixed Expenses       266,000.00 F
Breakeven point         26,600.00 G=F/C
Operating Income       154,000.00 H
Operating leverage                   2.73 I=C/H
Answer 2
Particulars Amount $
Sales                 25.00 See A
Variable Expenses                 18.00 J
Contribution margin                   7.00 K=A-J
Contribution margin % 28.00% L=K/A
Fixed Expenses       266,000.00 See F
Breakeven point         38,000.00 M=F/K
Answer 3 Amount $
Fixed Expenses       266,000.00 See F
Operating Income       154,000.00 See H
Target Contribution       420,000.00 N=F+H
Contribution margin                   7.00 See K
Units to be sold         60,000.00 O=N/K
Answer 4 Amount $
Contribution margin % of last year 40.00% See D
Variable Expenses % of last year 60.00% P= 1-D
Variable Expenses of current year                 18.00 See J
Sell Price should be                 30.00 Q= J/P
Answer 5 Amount $
Variable Expenses of last year                 15.00 See B
Decrease by 40%                   6.00 R= B*32.26%
Revised Variable Expenses                   9.00 S=B-R
Fixed Expenses of last year       266,000.00 See F
Fixed Expenses of current year       532,000.00 T= F*2
Particulars Amount $
Sales                 25.00 See A
Variable Expenses                   9.00 See S
Contribution margin                 16.00 U=A-S
Contribution margin % 64.00% V=U/A
Fixed Expenses       532,000.00 See T
Breakeven point         33,250.00 W=T/U
Answer 6
Fixed Expenses       532,000.00 See T
Operating Income       154,000.00 See H
Target Contribution       686,000.00 X= T+H
Contribution margin                 16.00 See U
Units to be sold         42,875.00 Y=X/U
Answer 7
Contribution margin income statement
Particulars Per Unit Total
Units         42,000.00
Sell Price                 25.00      1,050,000.00
Less- Variable costs                   9.00         378,000.00
Contribution margin                 16.00         672,000.00 Z
Less: Total Fixed costs         532,000.00 See T
Operating income         140,000.00 AA= Z-T
Know the answer?
Add Answer to:
Northwood Company manufactures basketballs. The company has a ball that sells for $25 At present, the...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the...

    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...

    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...

    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...

    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 36,000 of these balls, with the following results: $ Sales (36,000 balls) Variable expenses Contribution margin Fixed expenses Net operating income 900,000 540,000 360,000 263,000 97,000 Required: 1. Compute...

  • Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the...

    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 (52,800 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...

    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....

  • 16 Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present,...

    16 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. olnts Last year, the company sold 46,000 of these balls, with the following results: eBook Print Sales (46,000 balls) Variable expenses Contribution margin Fixed expenses Net operating income $ 1,150,000 690,000 460,000 318,000...

  • Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the...

    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...

    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...

    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...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT