Question

The budgets of four companies yield the following information: (Click the icon to view the budget information for the four companies.) Requirements 1. Fill in the blanks for each company. 2. Compute breakeven, in sales dollars, for each company. Which company has the lowest breakeven point in sales dollars? What causes the low breakeven point? 18,000 Target sales... 757,500 $ 480,000 $ 181,250 Variable expenses. 242.400 270.000 105,000 98,000 Foed expenses.... 175, 100 133,000 Operating income (loss) Units sold 110,000 11,600 Contribution margin per unit..... $ 6.08 10.00 $ 35.00 Contribution margin ratio...... Requirement 2. Compute breakeven, in sales dollars, for each company. Which company has the lowest breakeven point in sales dollars? What causes the low breakeven point? Begin by determining the formula, then compute the break even sales for each company one at a time. (Complete all answer boxes. For amounts with a 50 balance, make sure to enter"0" in the appropriate cell) - Breakeven sales 0.55 1 R S T ( Which company has the lowest breakeven point in sales dollars? What causes the low breakeven point? has the lowest breakeven point, primarily due to Choose from any list or enter any number in the input fields and then continue to the next question 3:26 PM of a 4) = 1/26/2019

Answer 1

1)				Q	R	S	T
	Target Sales			$ 757,500.00	$ 480,000.00	$ 181,250.00	$ 900,000.00
	Variable expenses			$ 242,400.00	$ 216,000.00	$   65,250.00	$ 270,000.00
	Fixed expenses			$ 340,000.00	$ 165,000.00	$   98,000.00	$ 497,000.00
	Operating income (loss)			$ 175,100.00	$   99,000.00	$   18,000.00	$ 133,000.00
	Units sold			85000	110000	11600	18000
	Cont. margin per unit			$             6.06	$             2.40	$           10.00	$           35.00
	Cont. margin ratio			0.68	0.55	0.64	0.70

General Formulas
Contribution Margin		=	Target Sales - Variable Cost
Cont. Margin p.u		=	Contribution Margin / Units Sold
Cont. Margin ratio		=	Contribution Margin / Target Sales

Formulas used:

-NM 31) Target Sales Variable expenses Fixed expenses Operating income (loss) Units sold Cont. margin per unit Cont. margin ratio 757500 242400 =E4-E5-E7 175100 =(E4-E5)/E9 6.06 =(E8*59)/E4 480000 =F4-(F8*F9) 165000 =F4-F5-F6 110000 =(F4*F10/F8 0.55 181250 =G4-G8*69) 98000 =G4-G5-G6 11600 10 =(G8*G9/64 =(H8*H9)+H5 270000 =H4-H5-H7 133000 18000 35 10 = (H8*H9)/H4

2)	Break even sales in dollars
	Formula	(Fixed Cost / Cont. margin ratio)
	Q	($ 340000 / 0.68)		$ 500,000.00
	R	($ 165000 / 0.55)		$ 300,000.00
	S	($ 98000 / 0.64)		$ 153,125.00
	T	($ 497000 / 0.70)		$ 710,000.00