Klinken Corporation’s contribution margin ratio on the sale of its most popular product is 50%. The product is priced at $87, annual fixed expenses are $835,000. Management is evaluating two options: (1) lowering variable costs by 20% and (2) reducing fix
Calculate the current level of break-even sales in dollars, as well as the break-even sales for the two options. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)
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Klinken Corporation’s contribution margin ratio on the sale of its most popular product is 50%. The product is priced at $87, annual fixed expenses are $835,000. Management is evaluating two options: (1) lowering variable costs by 20% and (2) reducing fix
Klinken Corporation's contribution margin ratio on the sale of its most popular product is 40%. The...
Klinken Corporation's contribution margin ratio on the sale of its most popular product is 40%. The product is priced at $89. annual fixed expenses are $845,000. Management is evaluating two options (1) lewening variable costs by 10% and (2) reducing fixed expenses by 10%. Required: Calculate the current level of break-even sales in dollars, as well as the break-even sales for the two options. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) Break-even sales...
Adams Company makes and sells products with variable costs of $24 each. Adams incurs annual fixed...
Adams Company makes and sells products with variable costs of $24 each. Adams incurs annual fixed costs of $321,280. The current sales price is $88. Note: The requirements of this question are interdependent. For example, the $256,000 desired profit introduced in Requirement c also applies to subsequent requirements. Likewise, the $80 sales price introduced in Requirement d applies to the subsequent requirements. Required a. Determine the contribution margin per unit. Complete this question by entering your answers in the tabs...
Sales Variable expenses Contribution margin Traceable fixed expenses Segment margin Common fixed expenses Net operating income...
Sales Variable expenses Contribution margin Traceable fixed expenses Segment margin Common fixed expenses Net operating income Total Company $1,020,000 765,000 255,000 156,000 99,000 65,000 34,000 East $ 680,000 44000 136,000 58.000 $ 78,000 $340,000 221,000 119,000 98,000 $ 21.000 Required: 1. Compute the companywide break-even point in dollar sales. 2. Compute the break-even point in dollar sales for the East region. 3. Compute the break-even point in dollar sales for the West region. 4. Prepare a new segmented income statement...
Lindon Company is the exclusive distributor for an automotive product that sells for $44.00 per unit...
Lindon Company is the exclusive distributor for an automotive product that sells for $44.00 per unit and has a CM ratio of 32%. The company's fixed expenses are $267,520 per year. The company plans to sell 20,000 units this year. Required: 1. What are the variable expenses per unit? (Round your answer to 2 decimal places.) Variable expenses per unit 2. Use the equation method: a. What is the break-even point in unit sales and in dollar sales? (Do not...
Sales $ 35,000,000 Operating expenses Variable expenses Fixed expenses $28,000,000 3,500,000 Total expenses 31,500,000 Operating profit...
Sales $ 35,000,000 Operating expenses Variable expenses Fixed expenses $28,000,000 3,500,000 Total expenses 31,500,000 Operating profit $ 3,500,000 1. Determine the breakeven point in sales dollars Breakeven point in sales dollars 17,500,000 2. Determine the required sales in dollars to earn a before-tax profit of $4,500,000. (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) Required sales in dollars $ 40,000,000 3. What is the breakeven point in sales dollars if the variable cost increases...
Exercise 3-3A Contribution margin ratio LO 3-1 Vernon Company incurs annual fixed costs of $115,560. Variable...
Exercise 3-3A Contribution margin ratio LO 3-1 Vernon Company incurs annual fixed costs of $115,560. Variable costs for Vernon's product are $18.60 per unit, and the sales price is $30.00 per unit. Vernon desires to earn an annual profit of $60,000. Required Use the contribution margin ratio approach to determine the sales volume in dollars and units required to earn the desired profit. (Do not round intermediate calculations. Round your final answers to the nearest whole number.) Sales in dollars...
1. What is the overall contribution margin (CM) ratio for the company? 2. What is the...
1. What is the overall contribution margin (CM) ratio for the
company?
2. What is the company's overall break-even point in dollar
sales?
3. Prepare a contribution format income statement at the
company's break-even point that shows the appropriate levels of
sales for the two products.
Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below: Sales Variable expenses Contribution margin Fixed expenses Net operating income...
Sales Variable expenses Contribution margin Traceable fixed expenses Total Company $ 750,000 450,000 300,000 138,000 North...
Sales Variable expenses Contribution margin Traceable fixed expenses Total Company $ 750,000 450,000 300,000 138,000 North $ 500,000 350,000 150,000 69,000 $ 81,000 South $ 250,000 100,000 150,000 69,000 $ 81,000 Segment margin Common fixed expenses Net operating income 162,000 60,000 $ 102,000 Required: 1. Compute the companywide break-even point in dollar sales. 2. Compute the break-even point in dollar sales for the North region. 3. Compute the break-even point in dollar sales for the South region. (For all requirements,...
Exercise 5-14 Break-Even and Target Profit Analysis [LO5-3, LO5-4, LO5-5, LO5-6] Lindon Company is the exclusive...
Exercise 5-14 Break-Even and Target Profit Analysis [LO5-3, LO5-4, LO5-5, LO5-6] Lindon Company is the exclusive distributor for an automotive product that sells for $37.00 per unit and has a CM ratio of 39%. The company’s fixed expenses are $432,900 per year. The company plans to sell 31,000 units this year. Required: 1. What are the variable expenses per unit? (Round your answer to 2 decimal places.) 2. Use the equation method: a. What is the break-even point in unit...
1. What is the company’s contribution margin (CM) ratio? 2. What is the estimated change in...
1. What is the company’s contribution margin (CM) ratio?
2. What is the estimated change in the company’s net operating
income if it can increase total sales by $1,800? (Do not round
intermediate calculations.)
1-a. The marketing manager argues that a $9,000 increase in
the monthly advertising budget would increase monthly sales by
$20,000. Calculate the increase or decrease in net operating
income.
1-b. Should the advertising budget be increased?
2-a. Refer to the original data. Management is considering
using...
Klinken Corporation's contribution margin ratio on the sale of its most popular product is 40%. The product is priced at $89. annual fixed expenses are $845,000. Management is evaluating two options (1) lewening variable costs by 10% and (2) reducing fixed expenses by 10%. Required: Calculate the current level of break-even sales in dollars, as well as the break-even sales for the two options. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) Break-even sales...
Sales Variable expenses Contribution margin Traceable fixed expenses Segment margin Common fixed expenses Net operating income Total Company $1,020,000 765,000 255,000 156,000 99,000 65,000 34,000 East $ 680,000 44000 136,000 58.000 $ 78,000 $340,000 221,000 119,000 98,000 $ 21.000 Required: 1. Compute the companywide break-even point in dollar sales. 2. Compute the break-even point in dollar sales for the East region. 3. Compute the break-even point in dollar sales for the West region. 4. Prepare a new segmented income statement...
Lindon Company is the exclusive distributor for an automotive product that sells for $44.00 per unit and has a CM ratio of 32%. The company's fixed expenses are $267,520 per year. The company plans to sell 20,000 units this year. Required: 1. What are the variable expenses per unit? (Round your answer to 2 decimal places.) Variable expenses per unit 2. Use the equation method: a. What is the break-even point in unit sales and in dollar sales? (Do not...
Sales $ 35,000,000 Operating expenses Variable expenses Fixed expenses $28,000,000 3,500,000 Total expenses 31,500,000 Operating profit $ 3,500,000 1. Determine the breakeven point in sales dollars Breakeven point in sales dollars 17,500,000 2. Determine the required sales in dollars to earn a before-tax profit of $4,500,000. (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) Required sales in dollars $ 40,000,000 3. What is the breakeven point in sales dollars if the variable cost increases...
Exercise 3-3A Contribution margin ratio LO 3-1 Vernon Company incurs annual fixed costs of $115,560. Variable costs for Vernon's product are $18.60 per unit, and the sales price is $30.00 per unit. Vernon desires to earn an annual profit of $60,000. Required Use the contribution margin ratio approach to determine the sales volume in dollars and units required to earn the desired profit. (Do not round intermediate calculations. Round your final answers to the nearest whole number.) Sales in dollars...
1. What is the overall contribution margin (CM) ratio for the
company?
2. What is the company's overall break-even point in dollar
sales?
3. Prepare a contribution format income statement at the
company's break-even point that shows the appropriate levels of
sales for the two products.
Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below: Sales Variable expenses Contribution margin Fixed expenses Net operating income...
Sales Variable expenses Contribution margin Traceable fixed expenses Total Company $ 750,000 450,000 300,000 138,000 North $ 500,000 350,000 150,000 69,000 $ 81,000 South $ 250,000 100,000 150,000 69,000 $ 81,000 Segment margin Common fixed expenses Net operating income 162,000 60,000 $ 102,000 Required: 1. Compute the companywide break-even point in dollar sales. 2. Compute the break-even point in dollar sales for the North region. 3. Compute the break-even point in dollar sales for the South region. (For all requirements,...
1. What is the company’s contribution margin (CM) ratio?
2. What is the estimated change in the company’s net operating
income if it can increase total sales by $1,800? (Do not round
intermediate calculations.)
1-a. The marketing manager argues that a $9,000 increase in
the monthly advertising budget would increase monthly sales by
$20,000. Calculate the increase or decrease in net operating
income.
1-b. Should the advertising budget be increased?
2-a. Refer to the original data. Management is considering
using...
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