Question

tuart Company makes and sells products with variable costs of $24 each. Stuart incurs annual fixed costs of $420,280. The current sales price is $103.

rev: 02_12_2020_QC_CS-199849

Required
The following requirements are interdependent. For example, the $316,000 desired profit introduced in Requirement c also applies to subsequent requirements. Likewise, the $80 sales price introduced in Requirement d applies to the subsequent requirements.

a. Determine the contribution margin per unit.

Stuart Company makes and sells products with variable costs of $24 each. Stuart incurs annual fixed costs of $420,280. The current sales price is $103.

rev: 02_12_2020_QC_CS-199849

b. Determine the break-even point in units and in dollars. Prepare an income statement using the contribution margin format.

Stuart Company makes and sells products with variable costs of $24 each. Stuart incurs annual fixed costs of $420,280. The current sales price is $103.

rev: 02_12_2020_QC_CS-199849

c. Suppose that Stuart desires to earn a $316,000 profit. Determine the sales volume in units and dollars required to earn the desired profit. Prepare an income statement using the contribution margin format.

Stuart Company makes and sells products with variable costs of $24 each. Stuart incurs annual fixed costs of $420,280. The current sales price is $103.

rev: 02_12_2020_QC_CS-199849

d. If the sales price drops to $80 per unit, what level of sales is required to earn the desired profit? Express your answer in units and dollars. Prepare an income statement using the contribution margin format.

mplete this question by entering your answers in the tabs below.

• Req E1
• Req E2

If fixed costs drop to $312,000, what level of sales is required to earn the desired profit? Express your answer in units and dollars. (Do not round intermediate calculations. Round your final answers to the nearest dollar and round units up to the next whole unit.)

Stuart Company makes and sells products with variable costs of $24 each. Stuart incurs annual fixed costs of $420,280. The current sales price is $103.

rev: 02_12_2020_QC_CS-199849

f. If variable cost rises to $30 per unit, what level of sales is required to earn the desired profit? Express your answer in units and dollars. Prepare an income statement using the contribution margin format.

Stuart Company makes and sells products with variable costs of $24 each. Stuart incurs annual fixed costs of $420,280. The current sales price is $103.

rev: 02_12_2020_QC_CS-199849

f. If variable cost rises to $30 per unit, what level of sales is required to earn the desired profit? Express your answer in units and dollars. Prepare an income statement using the contribution margin format.

Stuart Company makes and sells products with variable costs of $24 each. Stuart incurs annual fixed costs of $420,280. The current sales price is $103.

rev: 02_12_2020_QC_CS-199849

g. Assume that Stuart concludes that it can sell 13,200 units of product for $80 each. Recall that variable costs are $30 each and fixed costs are $312,000. Compute the margin of safety in units and dollars and as a percentage. (Do not round intermediate calculations. Round your answers to the nearest whole number. Round your percentage answer to nearest whole percentage For example, 0.1234 should be entered as 12%)

Stuart Company makes and sells products with variable costs of $24 each. Stuart incurs annual fixed costs of $420,280. The current sales price is $103.

rev: 02_12_2020_QC_CS-199849

f. If variable cost rises to $30 per unit, what level of sales is required to earn the desired profit? Express your answer in units and dollars. Prepare an income statement using the contribution margin format.

Answer 1