The following information is taken from Wampler Co.’s current-year contribution income statement: Sales $200,000 Contribution margin...
The following information is taken from Wampler Co.’s current-year contribution income statement:
|
Sales |
$200,000 |
|
Contribution margin |
120,000 |
|
Fixed costs |
90,000 |
|
Income taxes |
12,000 |
What was Wampler’s margin of safety?
A- $50,000
B-$168,000
C-$150,000
D- $182,000
Homework Answers
Contribution margin ratio = Contribution margin / Sales
= $120,000 / $200,000
= 0.6
Breakeven sales = Fixed cost / Contribution margin ratio
= $90,000 / 0.6
= $150,000
Margin of safety = Sales - Breakeven Sales
= $200,000 - $150,000
= $50,000
OPTION A- $50,000
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The following information is taken from Wampler Co.’s current-year contribution income statement: Sales $200,000 Contribution margin...
The following information is taken from Wampler Co's current year contribution income statement: Sales $200,000 Contribution...
The following information is taken from Wampler Co's current year contribution income statement: Sales $200,000 Contribution margin $120,000 Fixed costs $90,000 Income taxes $12,000 What was Wampler's margin of safety?
Hudson Co. reports the contribution margin income statement for 2019. HUDSON CO. Contribution Margin Income Statement...
Hudson Co. reports the contribution margin income statement for 2019. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (12,000 units at $225 each) $ 2,700,000 Variable costs (12,000 units at $180 each) 2,160,000 Contribution margin $ 540,000 Fixed costs 360,000 Pretax income $ 180,000 1. Compute the company’s degree of operating leverage for 2019. 2. If sales decrease by 4% in 2020, what will be the company’s pretax income? 3. Assume sales for 2020 decrease...
Hudson Co. reports the contribution margin income statement for 2019. HUDSON CO. Contribution Margin Income Statement...
Hudson Co. reports the contribution margin income statement for 2019. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (9,980 units at $225 each) Variable costs (9,900 units at $180 each) Contribution margin Fixed costs Pretax income $2.227,500 1,782,800 445.500 342.000 $ 103,500 1. Assume Hudson Co. has a target pretax income of $165,000 for 2020. What amount of sales (in dollars) is needed to produce this target income? 2. If Hudson achieves its target pretax...
[The following information applies to the questions displayed below.] Hudson Co. reports the contribution margin income...
[The following information applies to the questions
displayed below.]
Hudson Co. reports the contribution margin income statement for
2017.
HUDSON CO.
Contribution Margin Income Statement
For Year Ended December 31, 2017
Sales (9,900 units at $225 each)
$
2,227,500
Variable costs (9,900 units at $180 each)
1,782,000
Contribution margin
$
445,500
Fixed costs
342,000
Pretax income
$
103,500
2 ! Part 1 of 5 Required information Use the following information for the Exercises below. [The following information applies to the...
Hudson Co. reports the contribution margin income statement for 2017. HUDSON CO. Contribution Margin Income Statement...
Hudson Co. reports the contribution margin income statement for 2017. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2017 Sales (10,700 units at $300 each) $ 3,210,000 Variable costs (10,700 units at $240 each) 2,568,000 Contribution margin $ 642,000 Fixed costs 504,000 Pretax income $ 138,000 Exercise 21-17 Target income and margin of safety (in dollars) LO C2 1. Assume Hudson Co. has a target pretax income of $161,000 for 2018. What amount of sales (in dollars)...
Hudson Co. reports the contribution margin income statement for 2015. HUDSON CO. Contribution Margin Income Statement...
Hudson Co. reports the contribution margin income statement for 2015. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2015 Sales (10,500 units at $276 each) $ 2,898,000 Variable costs (10,500 units at $207 each) 2,173,500 Contribution margin $ 724,500 Fixed costs 400,200 Pretax income $ 324,300 2. If Hudson achieves its target pretax income for 2016, what is its margin of safety (in percent)? (Round your answer to 1 decimal place.)
Hudson Co. reports the contribution margin income statement for 2019. HUDSON CO. Contribution Margin Income Statement...
Hudson Co. reports the contribution margin income statement for 2019. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (11,000 units at $300 each) $ 3,300,000 Variable costs (11,000 units at $240 each) 2,640,000 Contribution margin 660,000 Fixed costs 360,000 Pretax income $ 300,000 1. Compute Hudson Co.'s break-even point in units. 2. Compute Hudson Co.'s break-even point in sales dollars.
Hudson Co. reports the contribution margin income statement for 2015. HUDSON CO. Contribution Margin Income Statement...
Hudson Co. reports the contribution margin income statement for 2015. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2015 Sales (10.200 units at $225 each) Variable costs (10,200 units at $185 each) $ 2.295.000 1,887,000 $ Contribution margin Fixed costs 408,000 279,500 Pretax income $ 128,500 If the company raises its selling price to $250 per unit. 1. Compute Hudson Co.'s contribution margin per unit. Contribution margin per unit 2. Compute Hudson Co.'s contribution margin ratio. Contribution...
Hudson Co. reports the contribution margin income statement for 2017 HUDSON CO. Contribution Margin Income Statement...
Hudson Co. reports the contribution margin income statement for 2017 HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2017 Sales (11,200 units at $280 each) Variable costs (11,200 units at $210 each) Contribution margin Fixed cost Pretax income $3,136,000 2,352,000 $784,000 567.000 $ 217,000 Exercise 18-18 Evaluating strategies LO C2 Assume the company is considering investing in a new machine that will increase its fixed costs by $37,500 per year and decrease its variable costs by $10...
The following information applies to the questions displayed below Hudson Co. reports the contribution margin income...
The following information applies to the questions displayed below Hudson Co. reports the contribution margin income statement for 2017 HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2017 Soles (9,600 units at $225 coch) Variable costs (9,600 units at $180 each) Contribution margin Fixed costs Pretax income $2,160,000 1.228. $ 82.ee Assume the company is considering investing in a new machine that will increase its fixed costs by $40.500 per year and decrease its variable costs by...
The following information is taken from Wampler Co's current year contribution income statement: Sales $200,000 Contribution margin $120,000 Fixed costs $90,000 Income taxes $12,000 What was Wampler's margin of safety?
Hudson Co. reports the contribution margin income statement for 2019. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (9,980 units at $225 each) Variable costs (9,900 units at $180 each) Contribution margin Fixed costs Pretax income $2.227,500 1,782,800 445.500 342.000 $ 103,500 1. Assume Hudson Co. has a target pretax income of $165,000 for 2020. What amount of sales (in dollars) is needed to produce this target income? 2. If Hudson achieves its target pretax...
[The following information applies to the questions
displayed below.]
Hudson Co. reports the contribution margin income statement for
2017.
HUDSON CO.
Contribution Margin Income Statement
For Year Ended December 31, 2017
Sales (9,900 units at $225 each)
$
2,227,500
Variable costs (9,900 units at $180 each)
1,782,000
Contribution margin
$
445,500
Fixed costs
342,000
Pretax income
$
103,500
2 ! Part 1 of 5 Required information Use the following information for the Exercises below. [The following information applies to the...
Hudson Co. reports the contribution margin income statement for 2015. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2015 Sales (10.200 units at $225 each) Variable costs (10,200 units at $185 each) $ 2.295.000 1,887,000 $ Contribution margin Fixed costs 408,000 279,500 Pretax income $ 128,500 If the company raises its selling price to $250 per unit. 1. Compute Hudson Co.'s contribution margin per unit. Contribution margin per unit 2. Compute Hudson Co.'s contribution margin ratio. Contribution...
Hudson Co. reports the contribution margin income statement for 2017 HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2017 Sales (11,200 units at $280 each) Variable costs (11,200 units at $210 each) Contribution margin Fixed cost Pretax income $3,136,000 2,352,000 $784,000 567.000 $ 217,000 Exercise 18-18 Evaluating strategies LO C2 Assume the company is considering investing in a new machine that will increase its fixed costs by $37,500 per year and decrease its variable costs by $10...
The following information applies to the questions displayed below Hudson Co. reports the contribution margin income statement for 2017 HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2017 Soles (9,600 units at $225 coch) Variable costs (9,600 units at $180 each) Contribution margin Fixed costs Pretax income $2,160,000 1.228. $ 82.ee Assume the company is considering investing in a new machine that will increase its fixed costs by $40.500 per year and decrease its variable costs by...
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