Question
In: Accounting
The following CVP income statements are available for Blanc Company and Noir Company. Blanc Company Noir...
The following CVP income statements are available for Blanc Company and Noir Company. Blanc Company Noir Company Sales $455,000 $455,000 Variable costs 273,000 227,500 Contribution margin 182,000 227,500 Fixed costs 159,250 204,750 Net income $22,750 $22,750
Compute margin of safety ratio for each company.
(Round answers to 3 decimal places, e.g.
0.321.)
|
Margin of Safety Ratio |
||
|---|---|---|
| Blanc Company |
Enter a number |
|
| Noir Company |
Enter a number |
Compute the degree of operating leverage for each company.
(Round answers to 2 decimal places, e.g.
1.56.)
|
Degree of Operating Leverage |
||
|---|---|---|
| Blanc Company |
Enter a number |
|
| Noir Company |
Enter a number |
Solutions
Expert Solution
| Answer: | ||
| Blanc Company |
Contribution margin ratio = Contribution margin / Sales = $ 182,000 / $ 455,000 |
40% |
| Noir Company |
Contribution margin ratio = Contribution margin / Sales = $ 227,500 / $ 455,000 |
50% |
| Blanc Company |
Break Even point in Dollars = Fixed Costs / Contribution margin ratio = $ 159,250 / 40% |
$ 398,125 |
| Noir Company |
Break Even point in Dollars = Fixed Costs / Contribution margin ratio = $ 204,750 / 50% |
$ 409,500 |
| (a) | Margin of Safety ratio | |
| Blanc Company |
Margin of Safety ratio = Current Sales (-)Break Even Sales / Current Sales = $ 455,000 (-) $ 398,125 / $ 455,000 = $ 56,875 / $ 455,000 |
12.5% (or ) 0.125 |
| Noir Company |
Margin of Safety ratio = Current Sales (-)Break Even Sales / Current Sales = $ 455,000 (-) $ 409,500 / $ 455,000 = $ 45,500 / $ 455,000 |
10% (or ) 0.1 |
| (b) | ||
| Degree of Operating Leverage | ||
| Blanc Company |
Degree of Operating Leverage = Contribution margin / Net Income = $ 182,000 / $ 22,750 |
8 |
| Noir Company |
Degree of Operating Leverage = Contribution margin / Net Income = $ 227,500 / $ 22,750 |
10 |
ekkarill92 answered 2 years agoRelated Solutions
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Noir Company
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$457,000
Variable costs
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155,380
Contribution margin
191,940
301,620
Fixed costs
171,000
280,680
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Noir Company
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Fixed costs
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275,880
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(Round answers to 3 decimal places, e.g.
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Noir Company:
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$545,000
Variable costs
327,000
272,500
Contribution margin
218,000
272,500
Fixed costs
207,100
261,600
Net income
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$10,900
a.) Compute the break-even point in dollars for each company.
(Round answers to 0 decimal places, e.g.
5,125.)
b.) Compute the margin of safety ratio for each
company. (Round answers to 0 decimal places, e.g.
5,125.)
c.) Compute the degree of operating
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The following CVP income statements are available for Blanc Company
and Noir Company.
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Noir Company
Sales
$529,000
$529,000
Variable costs
296,240
185,150
Contribution margin
232,760
343,850
Fixed costs
165,000
276,090
Net income
$67,760
$67,760
Calculate Contribution margin ratio. (Round answers
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Contribution Margin Ratio
Blanc Company
Noir Company
Compute break-even point in dollars for each company.
(Round answers to 0 decimal places, e.g.
1,225.)
Break-even Point
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$
Noir Company
$
Compute...
Question 2 --/1 The following CVP income statements are available for Blanc Company and Noir Company....
Question 2
--/1
The following CVP income statements are available for Blanc
Company and Noir Company.
Blanc Company
Noir Company
Sales
$ 530,000
$ 530,000
Variable costs
318,000
265,000
Contribution margin
212,000
265,000
Fixed costs
203,520
256,520
Net income
$ 8,480
$ 8,480
Calculate Contribution margin ratio. (Round answers
to 2 decimal places, e.g. 0.32.)
Contribution Margin Ratio
Blanc Company
Noir Company
eTextbook and Media
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(Round answers to 0 decimal places,...
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247,000 45,000 Contribution margin 243,000 445,000 Fixed costs
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The following totals are used to create a CVP Income Statement
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Financial Figures For the Year Ended 12/31/18 Sales (100 units)
$10,000 Variable Costs: Direct Labor $1,500 Direct Materials 1,400
Factory Overhead (variable) 2,000 Selling Expenses (variable) 600
Administrative Expenses (variable) 500 Fixed Costs: Factory
Overhead (fixed) $900 Selling Expenses (fixed) 1,000 Administrative
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system and there are no Raw Materials, Work-in-Process or Finished...
The following totals are used to create a CVP Income Statement for Frederick Company for FY2018:...
The following totals are used to create a CVP Income
Statement for Frederick Company for FY2018:
Frederick Company
Selected Financial Figures
For the Year Ended 12/31/18
Sales (100 units)
$10,000
Variable Costs:
Direct Labor
$1,800
Direct
Materials
1,200
Factory Overhead
(variable)
2,000
Selling Expenses
(variable)
600
Administrative Expenses
(variable)
500
Fixed Costs:
Factory Overhead
(fixed)
$700
Selling Expenses
(fixed)
1,000
Administrative Expenses
(fixed)
1,000
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The following totals are used to create a CVP Income Statement for Frederick Company for FY2018:...
The following totals are used to create a CVP Income
Statement for Frederick Company for FY2018:
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Selected Financial Figures
For the Year Ended 12/31/18
Sales (100 units)
$10,000
Variable Costs:
Direct Labor
$1,850
Direct
Materials
1,400
Factory Overhead
(variable)
2,000
Selling Expenses
(variable)
600
Administrative Expenses
(variable)
500
Fixed Costs:
Factory Overhead
(fixed)
$850
Selling Expenses
(fixed)
1,000
Administrative Expenses
(fixed)
1,000
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Total
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Sales (9,700 units)
$485,000
$50
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242,500
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Contribution margin
242,500
$25.00
Fixed expenses
187,500
Net income
$55,000
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changes to unit variable costs or fixed costs. Management is
confident that this change...
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