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
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
$457,000
$457,000
Variable costs
265,060
155,380
Contribution margin
191,940
301,620
Fixed costs
171,000
280,680
Net income
$20,940
$20,940
Calculate Contribution margin ratio. (Round answers
to 2 decimal places, e.g. 0.32.)
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
Blanc Company
$
Noir Company
$
Compute...
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
$570,000
$570,000
Variable costs
342,000
285,000
Contribution margin
228,000
285,000
Fixed costs
218,880
275,880
Net income
$9,120
$9,120
1. Compute margin of safety ratio for each company.
(Round answers to 3 decimal places, e.g.
0.321.)
Margin of safety ratio
Blanc Company:
Noir Company:
2.
Assuming that sales revenue increases by 20%, prepare a CVP
income statement for each company. (Enter negative
amounts...
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
$545,000
$545,000
Variable costs
327,000
272,500
Contribution margin
218,000
272,500
Fixed costs
207,100
261,600
Net income
$10,900
$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
leverage for...
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
$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
to 2 decimal places, e.g. 0.32.)
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
Blanc Company
$
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
Compute the break-even point in dollars for each company.
(Round answers to 0 decimal places,...
Current Attempt in Progress The CVP income statements shown below are available for Armstrong Company and...
Current Attempt in Progress The CVP income statements shown
below are available for Armstrong Company and Contador Company.
Armstrong Co. Contador Co. Sales $490,000 $490,000 Variable costs
247,000 45,000 Contribution margin 243,000 445,000 Fixed costs
143,000 345,000 Net income $100,000 $100,000 (a1) Compute the
degree of operating leverage for each company. (Round answers to 2
decimal places, e.g. 1.15.) Degree of Operating Leverage Armstrong
Contador (b) Assuming that sales revenue increases by 10%, prepare
a variable costing income statement for...
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 $1,500 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
Expenses (fixed) 1,000 Frederick Company utilizes a JIT production
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
Frederick Company utilizes a JIT production 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
$1,850
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
Frederick Company utilizes a JIT production system and
there are no Raw Materials, Work-in-Process or Finished...
Victoria Company reports the following operating results for the month of April. VICTORIA COMPANY CVP Income...
Victoria Company reports the following operating results for the
month of April.
VICTORIA COMPANY
CVP Income Statement
For the Month Ended April 30, 2017
Total
Per Unit
Sales (9,700 units)
$485,000
$50
Variable costs
242,500
25.00
Contribution margin
242,500
$25.00
Fixed expenses
187,500
Net income
$55,000
Management is considering the following course of action to
increase net income: Reduce the selling price by 5%, with no
changes to unit variable costs or fixed costs. Management is
confident that this change...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- 3) You are rolling a 12 sided die 8 times. a) What is the size for...
- explain the difference between quantitative and qualitative research strategies. Provide an example of a crime based...
- use postorder and inorder tree traversals to make preorder traversal. #!/usr/bin/env python3 # encoding: UTF-8 """Turning...
- 1. Write an if-else statement to describe an object. Print "Balloon" if isBalloon is true and...
- An investor is considering purchasing a Treasury bond with a 20 year maturity, an 8% coupon...
- Write a program that copies the contents of one file to a destination file. This program...
- how to conduct a marketing mix for 3d crest white strips
ADVERTISEMENT