Question
In: Accounting
Calico Joe Fabrics sells a single product. The company estimates total fixed costs at $360,000 with...
Calico Joe Fabrics sells a single product. The company estimates
total fixed costs at $360,000 with demand and unit variable costs
at various activity levels as follows:
| Units Demanded | Unit Price | Total Variable Costs | ||
| 73,000 | $31 | $1,606,000 | ||
| 83,000 | 30 | 1,826,000 | ||
| 93,000 | 29 | 2,046,000 | ||
| 103,000 | 28 | 2,266,000 | ||
| 113,000 | 27 | 2,486,000 |
How much profit will Calico Joe Fabrics have if a price of $26 is
charged and demand is 120,000?
| $480,000 |
| $2,760,000 |
| $3,120,000 |
| $120,000 |
Solutions
Expert Solution
| Correct Option D i.e. $120,000 | ||||
| Note 1: Calculation of Profit | ||||
| Sales Revenue | 3,120,000 | (120000*26) | ||
| Less: Variable cost | 2,640,000 | (120000*22) | ||
| Contribution margin | 480,000 | |||
| Less: Fixed cost | 360,000 | |||
| profit | 120,000 | |||
| Note 2: | ||||
| Units Demanded | Unit Price | Total Variable Costs | Variable cost per unit=(Total variable cost/Units Demand) | |
| 73,000 | 31 | 1,606,000 | 22 | |
| 83,000 | 30 | 1,826,000 | 22 | |
| 93,000 | 29 | 2,046,000 | 22 | |
| 103,000 | 28 | 2,266,000 | 22 | |
| 113,000 | 27 | 2,486,000 | 22 | |
ekkarill92 answered 2 years agoRelated Solutions
AD Company estimates that variable costs will be 70% of sales and fixed costs will total...
AD Company estimates that variable costs will be 70%
of sales and fixed costs will total $1,800,000. The selling price
of the product is $10, and 700,000 units will be sold.
Instructions: Using the mathematical equation
(a) Compute the break-even point in units and
dollars.
(b) Compute the margin of safety in dollars and as a
ratio.
(c) Compute net
income.
Glacial Company estimates that variable costs will be 63.2% of sales, and fixed costs will total...
Glacial Company estimates that variable costs will be 63.2% of
sales, and fixed costs will total $655,000. The selling price of
the product is $3.90.
Compute the break-even point in (1) units and (2) dollars.
a. Break even sales __ units
b. Break even sales __ $$
Assuming actual sales are $2,115,000, compute the margin of
safety in (1) dollars and (2) as a ratio.
a. Margin of safety __ $$
b. Margin of safety ratio (as percentage)
dex company manufactures a single product assume the following data for 2016: Fixed costs in total:...
dex company manufactures a single product assume the following
data for 2016:
Fixed costs in total:
Selling and administrative 54,000
Production 72,000
Variable costs per unit:
Selling and administrative 3
Production 9
there were no units in inventory on january 1. during the
year, 18,000 units were produced and 15,000 were sold. the selling
price of dex company is 25 per unit. how much company’s net income
for 2016 under the direct coating method?
A Company manufactures a product A. The company estimates the cost function for the total costs.
A Company manufactures a product A. The company estimates the cost function for the total costs. The cost driver is number of units. The following informations were collected: Month Units Total CostsJanuary 3,560 $242,400February 3,800 $252,000March 4,000 $260,000April 3,600 $244,000May 3,200 $228,000June 3,040 $221,600 Compute a cost function using the high-low method.
YUX Corporation sells a single product for $40. Its management estimates the following revenues and costs...
YUX Corporation sells a single product for $40. Its management
estimates the following revenues and costs for the year 2020:
Net sales
$420,000
Selling expenses—variable
$22,000
Direct materials
97,500
Selling expenses—fixed
19,000
Direct labour
62,700
Administrative expenses—variable
9,400
Manufacturing overhead—variable
18,400
Administrative expenses—fixed
9,600
Manufacturing overhead—fixed
11,720
(a)
Assuming fixed costs and net sales are spread evenly throughout the
year, determine YUX’s monthly break-even point in units and
dollars. (Round answers to 0 decimal places, e.g.
5,275.)
Monthly break-even in...
YUX Corporation sells a single product for $50. Its management estimates the following revenues and costs...
YUX Corporation sells a single product for $50. Its management
estimates the following revenues and costs for the year
2020:
Net sales
$525,000
Selling expenses—variable
$20,300
Direct materials
148,000
Selling expenses—fixed
18,600
Direct labour
65,900
Administrative expenses—variable
10,000
Manufacturing overhead—variable
18,300
Administrative expenses—fixed
10,800
Manufacturing overhead—fixed
17,400
A.
Determine the percentage increase in annual profits if YUX
Corporation increases its selling price by 20% and all other
factors (including demand) remain constant. (Round
answer to 2 decimal places, e.g. 15.25%.)...
UX Corporation sells a single product for $40. Its management estimates the following revenues and costs...
UX Corporation sells a single product for $40. Its management
estimates the following revenues and costs for the year 2020:
Net sales
$420,000
Selling expenses—variable
$22,000
Direct materials
97,500
Selling expenses—fixed
19,000
Direct labour
62,700
Administrative expenses—variable
9,400
Manufacturing overhead—variable
18,400
Administrative expenses—fixed
9,600
Manufacturing overhead—fixed
11,720
Assuming fixed costs and net sales are spread evenly throughout
the year, determine YUX’s monthly break-even point in units and
dollars. (Round answers to 0 decimal places, e.g.
5,275.)
Monthly break-even in units...
YUX Corporation sells a single product for $40. Its management estimates the following revenues and costs...
YUX Corporation sells a single product for $40. Its management
estimates the following revenues and costs for the year 2020:
Net sales
$428,000
Selling expenses—variable
$18,600
Direct materials
112,100
Selling expenses—fixed
18,300
Direct labour
55,400
Administrative expenses—variable
9,100
Manufacturing overhead—variable
18,800
Administrative expenses—fixed
9,100
Manufacturing overhead—fixed
13,640
Assuming fixed costs and net sales are spread evenly throughout
the year, determine YUX’s monthly break-even point in units and
dollars. (Round answers to 0 decimal places, e.g.
5,275.)
Monthly break-even in units...
- XYZ Company sells its only product for $40 per unit. Its total fixed costs are...
- XYZ Company sells its only product for $40
per unit. Its total fixed costs are $180,000 per annum. Its CM
ratio is 20%. XYZ plans to sell 16,000 units this year.
Required:
1. Calculate CM per unit and the variable cost per unit.
2. Calculate break-even point in unit sales and in dollar
sales?
3. Calculate the unit sales and dollar sales required to achieve
a target profit of $60,000 per year?
4. Assume that the company is able...
Madison Company produces a single product which sells for $30 per unit. Fixed expenses total $13,500...
Madison Company produces a single product which sells for $30
per unit. Fixed expenses total $13,500 per month, and variable
expenses are $12 per unit. During the current month, sales, in
units, totaled 900 units.
Using the information above, match each of the items listed below
with the appropriate amount.
-
Contribution margin per unit.
-
Contribution margin ratio.
-
Break-even point in units.
-
Break-even point in dollars.
...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- In racket Assume that the elements of a list are indexed starting with 1. Write a...
- Describe System Development Life Cycle (SDLC) and how it is used.
- What symbolism do you find in the play,Oedipus?
- • Using the Scanner class to obtain input from the user. • Using printf to output...
- In each of the following situations, develop a tentative plan for the client. List the various...
- MARGI sells different types of wine. Customers place orders to the most popular “Summer Wine” at...
- Java. If possible please put explanations for each line of code. Write a test program that...
ADVERTISEMENT