Homework Answers
Answer:
1. Operating Income
Operating Income = Gross Margin - Fixed Non-Manufacturing Cost
= (25% × Revenue) - $150,000
= (25% × $1,200,000) - $150,000
= $300,000 - $150,000
= $150,000
.
2.
Total Manufacturing Cost = (1- Gross margin) × Revenue
= (1-.25) × $1,200,000
= .75 × $1,200,000
= $900,000
a.) Variable Manufcturing Cost
Variable Manufcturing Cost = (1- Contribution Margin) × Revenue
= (1 - .4) × $1,200,000
= .6 × $1,200,000
= $720,000
Note : There is no Non- manufacturing Variable costs
b.) Fixed Manufacturing Cost
= Total Manufacturing Cost - Variable Manufacturing Cost
= $900,000 - $720,000
= $180,000
.
3.)
a. Break even Revenue
Break even Revenue = Total Fixed Cost ÷ Contribution Margin Ratio
= ($150,000 + $180,000) ÷ .40
= $330,000 ÷ .40
= $825,000
b.) Degree of operating leverage
= Contribution Margin ÷ Operating Income
= (Revenue × Contribution margin Ratio) ÷ Operating Income
= ($1,200,000 × .40) ÷ $150,000
= $480,000 ÷ $150,000
= 3.2
.
4.)
Estimated Pre-tax operating income = first year Operating income × 140%
= $150,000 × 140%
= $210,000
Break-even revenue = (Fixed Cost + Estimated Profit) ÷ Contribution Margin Ratio
= ($330,000 + $210,000) × .40
= $540,000 ÷ .40
= $1,350,000
Add Answer to:
Cost-Volume-Profit Analysis (12 points) Gamma manufacturing company, had revenue of $1,200,000 and a gross margin of...
Total Revenue Profit Total Cost CVP Analysis Variable Cout Fed Cost Units Sold In Class Example...
Total Revenue Profit Total Cost CVP Analysis Variable Cout Fed Cost Units Sold In Class Example Ritchie Manufacturing Company makes a product that it sells for $150 per unit. The company incurs variable manufacturing costs of $60 per unit. Variable selling expenses are $18 per unit, annual fixed manufacturing costs are $480,000, and fixed selling and administrative costs are $240,000 per year. (1) Calculate the breakeven point in units and sales dollars. (2) Prepare a contribution margin income statement to...
Allen Manufacturing manufactures a single product. Cost, sales, and production information for the company and its...
Allen Manufacturing manufactures a single product. Cost, sales, and production information for the company and its single product is as follows: i (Click the icon to view the data.) Read the requirements Requirement 1. Prepare an income statement for the upcoming year using variable costing. Allen Manufacturing Contribution Margin Income Statement (Variable Costing) For the Year Ended December 31 Sales revenue Less: Variable expenses Variable cost of goods sold Variable operating expenses Contribution margin Less: Fixed expenses Fixed manufacturing overhead...
Mastery Problem: Cost-Volume-Profit Analysis Cost Cost Behavior Cover-to-Cover Company is a manufacturer of shelving for books....
Mastery Problem: Cost-Volume-Profit Analysis Cost Cost Behavior Cover-to-Cover Company is a manufacturer of shelving for books. The company has compiled the following cost data, and wants your help in determining the cost behavior. After reviewing the data, complete requirements (1) and (2) that follow. Total Total Total Machine Units Lumber Utilities Depreciation Produced Cost Cost 11,000 shelves $132,000 $14,150 $140,000 22,000 shelves 264,000 26,800 140,000 44,000 shelves 528,000 52,100 140,000 55,000 shelves 660,000 64,750 140,000 1. Determine whether the costs...
Armilla Manufacturing manufactures a single product. Cost, sales, and production information for the company and its...
Armilla Manufacturing manufactures a single product. Cost, sales, and production information for the company and its single product is as follows: (Click the icon to view the data.) Read the requirements. i More Info Requirement 1. Prepare an income statement for the upcoming year using variable costing. • Armilla Manufacturing Contribution Margin Income Statement (Variable Costing) For the Year Ended December 31 Sales revenue Less: Variable expenses Variable cost of goods sold Sales price per unit $46 Variable manufacturing costs...
Mastery Problem: Cost-Volume-Profit Analysis Cost Behavior Cover-to-Cover Company is a manufacturer of shelving for books. The...
Mastery Problem: Cost-Volume-Profit Analysis Cost Behavior Cover-to-Cover Company is a manufacturer of shelving for books. The company has compiled the following cost data, and wants your help in determining the cost behavior. After reviewing the data, complete requirements (1) and (2) that follow. Total Total Total Machine Units Lumber Utilities Depreciation Produced Cost Cost Cost 7,000 shelves $84,000 $9,550 $120,000 14,000 shelves 168,000 17,600 120,000 28.000 shelves 336,000 33,700 120,000 35,000 shelves 420,000 41,750 120,000 1. Determine whether the costs...
Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income (loss) Year...
Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income (loss) Year 1 $1,000,000 740,000 260,000 230,000 $ 30,000 Year 2 $ 780,000 520,000 260,000 200,000 $ 60,000 Year 3 $1,000,000 785,000 215,000 230,000 $ (15,000) In the latter part of Year 2, a competitor went out of business and in the process dumped a large number of units on the market. result, Starfax's sales dropped by 20% during Year 2 even though production increased during...
Watson Company has monthly fixed costs of $83.000 and a 40% contribution margin Tato. IT the...
Watson Company has monthly fixed costs of $83.000 and a 40% contribution margin Tato. IT the company has set a target monthly income of $15,000, what dollar amon sales must be made to produce the target income? inc All of these During its most recent fiscal year, ost recent fiscal year, Dover, Inc. had total sales of $3,200,000. Contribution 902 ang amounted to $1,500,000 and pretax income was $400,000. What amount she been reported as variable costs in the company's...
1. The Famagusta Inn's income statement is as follows: Revenue Variable Costs Contribution Margin Rooms 5,500,000...
1. The Famagusta Inn's income statement is as follows: Revenue Variable Costs Contribution Margin Rooms 5,500,000 1,200,000 4,300,000 Food 3,000,000 1,000,000 2,000,000 Total 8,500,000 2,200,000 6,300,000 Fixed Costs Pretax Income Taxes Net Income 2,000,000 4,300,000 1,075,000 3,225,000 *Includes Lease Expense of $700,000 Required: a) What is the breakeven point for the Famagusta Inn? b) If the fixed cost lease is traded for a variable lease of 10% of total sales, what is the revised breakeven point for the Famagusta Inn?...
omheducation.com 2 and 3) Exercise 2-54 (Algo) Gross Margin and Contribution Margin Income Statem The following...
omheducation.com 2 and 3) Exercise 2-54 (Algo) Gross Margin and Contribution Margin Income Statem The following data are from the accounting records of Niles Castings for year 2 87,009 Units produced and sold Total revenues and costs Sales revenue Direct materials costs Direct labor costs Variable manufacturing overhead Fixed manufacturing overhead Variable marketing and administrative costs Fixed marketing and administrative costs $ 270,000 60,000 32,eee 11,000 43,000 16,500 36,000 ok ences Required: a. Prepare a gross margin income statement. b....
cost volume profit analysis The Woodcraft Company produces thin limestone sheets that are used for the...
cost volume profit analysis
The Woodcraft Company produces thin limestone sheets that are used for the facings on buildings. As can be seen in the contribution margin statement, last year the company had a net profit of S157 500, based on sales of 1800 tonnes. The manufacturing capacity of the firm's facilities is 3000 tonnes per year Woodcraft Company Contribution Margin Statement Year ded 31 December $900 000 Sales Variable costs Manufacturing Selling costs Total variable costs Contribution margin Fixed...
Total Revenue Profit Total Cost CVP Analysis Variable Cout Fed Cost Units Sold In Class Example Ritchie Manufacturing Company makes a product that it sells for $150 per unit. The company incurs variable manufacturing costs of $60 per unit. Variable selling expenses are $18 per unit, annual fixed manufacturing costs are $480,000, and fixed selling and administrative costs are $240,000 per year. (1) Calculate the breakeven point in units and sales dollars. (2) Prepare a contribution margin income statement to...
Allen Manufacturing manufactures a single product. Cost, sales, and production information for the company and its single product is as follows: i (Click the icon to view the data.) Read the requirements Requirement 1. Prepare an income statement for the upcoming year using variable costing. Allen Manufacturing Contribution Margin Income Statement (Variable Costing) For the Year Ended December 31 Sales revenue Less: Variable expenses Variable cost of goods sold Variable operating expenses Contribution margin Less: Fixed expenses Fixed manufacturing overhead...
Mastery Problem: Cost-Volume-Profit Analysis Cost Cost Behavior Cover-to-Cover Company is a manufacturer of shelving for books. The company has compiled the following cost data, and wants your help in determining the cost behavior. After reviewing the data, complete requirements (1) and (2) that follow. Total Total Total Machine Units Lumber Utilities Depreciation Produced Cost Cost 11,000 shelves $132,000 $14,150 $140,000 22,000 shelves 264,000 26,800 140,000 44,000 shelves 528,000 52,100 140,000 55,000 shelves 660,000 64,750 140,000 1. Determine whether the costs...
Armilla Manufacturing manufactures a single product. Cost, sales, and production information for the company and its single product is as follows: (Click the icon to view the data.) Read the requirements. i More Info Requirement 1. Prepare an income statement for the upcoming year using variable costing. • Armilla Manufacturing Contribution Margin Income Statement (Variable Costing) For the Year Ended December 31 Sales revenue Less: Variable expenses Variable cost of goods sold Sales price per unit $46 Variable manufacturing costs...
Mastery Problem: Cost-Volume-Profit Analysis Cost Behavior Cover-to-Cover Company is a manufacturer of shelving for books. The company has compiled the following cost data, and wants your help in determining the cost behavior. After reviewing the data, complete requirements (1) and (2) that follow. Total Total Total Machine Units Lumber Utilities Depreciation Produced Cost Cost Cost 7,000 shelves $84,000 $9,550 $120,000 14,000 shelves 168,000 17,600 120,000 28.000 shelves 336,000 33,700 120,000 35,000 shelves 420,000 41,750 120,000 1. Determine whether the costs...
Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income (loss) Year 1 $1,000,000 740,000 260,000 230,000 $ 30,000 Year 2 $ 780,000 520,000 260,000 200,000 $ 60,000 Year 3 $1,000,000 785,000 215,000 230,000 $ (15,000) In the latter part of Year 2, a competitor went out of business and in the process dumped a large number of units on the market. result, Starfax's sales dropped by 20% during Year 2 even though production increased during...
Watson Company has monthly fixed costs of $83.000 and a 40% contribution margin Tato. IT the company has set a target monthly income of $15,000, what dollar amon sales must be made to produce the target income? inc All of these During its most recent fiscal year, ost recent fiscal year, Dover, Inc. had total sales of $3,200,000. Contribution 902 ang amounted to $1,500,000 and pretax income was $400,000. What amount she been reported as variable costs in the company's...
1. The Famagusta Inn's income statement is as follows: Revenue Variable Costs Contribution Margin Rooms 5,500,000 1,200,000 4,300,000 Food 3,000,000 1,000,000 2,000,000 Total 8,500,000 2,200,000 6,300,000 Fixed Costs Pretax Income Taxes Net Income 2,000,000 4,300,000 1,075,000 3,225,000 *Includes Lease Expense of $700,000 Required: a) What is the breakeven point for the Famagusta Inn? b) If the fixed cost lease is traded for a variable lease of 10% of total sales, what is the revised breakeven point for the Famagusta Inn?...
omheducation.com 2 and 3) Exercise 2-54 (Algo) Gross Margin and Contribution Margin Income Statem The following data are from the accounting records of Niles Castings for year 2 87,009 Units produced and sold Total revenues and costs Sales revenue Direct materials costs Direct labor costs Variable manufacturing overhead Fixed manufacturing overhead Variable marketing and administrative costs Fixed marketing and administrative costs $ 270,000 60,000 32,eee 11,000 43,000 16,500 36,000 ok ences Required: a. Prepare a gross margin income statement. b....
cost volume profit analysis
The Woodcraft Company produces thin limestone sheets that are used for the facings on buildings. As can be seen in the contribution margin statement, last year the company had a net profit of S157 500, based on sales of 1800 tonnes. The manufacturing capacity of the firm's facilities is 3000 tonnes per year Woodcraft Company Contribution Margin Statement Year ded 31 December $900 000 Sales Variable costs Manufacturing Selling costs Total variable costs Contribution margin Fixed...
Most questions answered within 3 hours.
-
a radio station transmits at 78.1 mhz. a hz is an inverse
second. how far apart...
asked 9 minutes ago -
Write the equilibrium expression for the dissociation in
water for CH5N, C2H5O2COOH, H3AsO4, KClO2, HC2H2ClO2.
asked 15 minutes ago -
In risk management, insurance is an example of:
Select one:
a. Risk avoidance
b. Risk deflection...
asked 16 minutes ago -
Wildhorse Company follows the practice of pricing its inventory
at the lower-of-cost-or-market, on an individual-item
basis....
asked 51 minutes ago -
3. (10 pts) You grow a corn crop that yields 150 bushels ac-1,
with the following...
asked 39 minutes ago -
7. The term Six Sigma refers to:
Select one:
a. The control limits established in a...
asked 49 minutes ago -
For the following reaction: A(g) + 2 B(g) ⇌ 2 C(g) Calculate the
equilibrium constant K...
asked 51 minutes ago -
Which of the following best describes tidal volume? options:
1.The amount of oxygen in the air...
asked 1 hour ago -
1. Smaller cost distortions occur when the traditional systems'
single indirect-cost rate and the activity-cost-driver rates:...
asked 1 hour ago -
Using either a FMECA approach or some other appropriate RCA
tool, identify five risk treatment actions...
asked 1 hour ago -
If for a test the P-value is between 0.0025 and 0.005, what
conclusion can you draw?...
asked 1 hour ago -
Using Python. Write a function clean2(aList) that takes a list
of integers aList as argument, and...
asked 1 hour ago