Question
In: Accounting
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 |
||||
|
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 will increase unit sales by 10%.
Using the contribution margin technique, compute the break-even
point in units and dollars and margin of safety in dollars:
(Round intermediate calculations to 4 decimal places
e.g. 0.2522 and final answer to 0 decimal places, e.g.
2,510.)
(a) Assuming no changes to selling price or
costs.
| Break-even point | units | ||
| Break-even point |
$ |
||
| Margin of safety |
$ |
(b1) Assuming changes to sales price and volume as
described above.
| Break-even point | units | ||
| Break-even point |
$ |
||
| Margin of safety |
$ |
Solutions
ekkarill92 answered 2 years agoRelated Solutions
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, 2020
Total
Per Unit
Sales (9,000 units)
$450,000
$50
Variable costs
225,000
25.00
Contribution margin
225,000
$25.00
Fixed expenses
174,900
Net income
$50,100
Management is considering the following course of action to
increase net income: Reduce the selling price by 6%, with no
changes to unit variable costs or fixed costs. Management is
confident that this change...
a) Barnes Company reports the following operating results for the month of August: sales $300,000 (units...
a) Barnes Company reports the following operating results for
the month of August: sales $300,000 (units 5,000); variable costs
$225,000; and fixed costs $71,400. Management is considering the
following independent courses of action to increase net
income.
Compute the net income to be earned under each alternative.
1. Increase selling price by 10% with no change in
total variable costs or sales volume.
$
2. Reduce variable costs to 56% of
sales.
$
3. Reduce fixed costs by $24,000.
$...
Cullumber Company reports the following operating results for the month of August: sales $382,500 (units 5,100),...
Cullumber Company reports the following operating results for
the month of August: sales $382,500 (units 5,100), variable costs
$247,000, and fixed costs $96,000. Management is considering the
following independent courses of action to increase net
income.
1.
Increase selling price by 12% with no change in total variable
costs or units sold.
2.
Reduce variable costs to 57% of sales.
Compute the net income to be earned under each
alternative.
1.
Net Income
$enter a dollar amount
2.
Net Income...
Birchfield Company reports the following operating results for the month of February: sales $816,000 (units 13,600);...
Birchfield Company reports the following operating results for
the month of February: sales $816,000 (units 13,600); variable
costs $440,640; and fixed costs $191,600. Management is considering
the following independent courses of action to increase net income.
1. Increase selling price by 2.3% with no change in total variable
costs or units sold. 2. Reduce variable costs to 50.20% of sales.
Compute the net income to be earned under each alternative. (Round
per unit calculations to 2 decimal places, e.g. 15.25...
Bramble Company reports the following operating results for the month of August: sales $325,000 (units 5,000);...
Bramble Company reports the following operating results for the
month of August: sales $325,000 (units 5,000); variable costs
$212,000; and fixed costs $70,400. Management is considering the
following independent courses of action to increase net
income.
Compute the net income to be earned under each alternative.
1. Increase selling price by 10% with no change in
total variable costs or sales volume.
Net income
$enter a net income if the selling price is increased by 10%
2. Reduce variable costs...
Coronado Company reports the following operating results for the month of August: sales $310,000 (units 5,000);...
Coronado Company reports the following operating results for the
month of August: sales $310,000 (units 5,000); variable costs
$223,000; and fixed costs $70,800. Management is considering the
following independent courses of action to increase net income.
Compute the net income to be earned under each alternative. 1.
Increase selling price by 10% with no change in total variable
costs or sales volume. Net income $enter a net income if the
selling price is increased by 10% 2. Reduce variable costs...
Barnes Company reports the following operating results for the month of August: sales $300,000 (units 5,000);...
Barnes Company reports the following operating results for the
month of August: sales $300,000 (units 5,000); variable costs
$223,000; and fixed costs $70,800. Management is considering the
following independent courses of action to increase net
income.
Compute the net income to be earned under each alternative.
1. Increase selling price by 10% with no change
in total variable costs or sales volume.
Net income
$
2. Reduce variable costs to 56% of
sales.
Net income
$
3. Reduce fixed costs...
Coronado Company reports the following operating results for the month of August: sales $310,000 (units 5,000);...
Coronado Company reports the following operating results for the
month of August: sales $310,000 (units 5,000); variable costs
$214,000; and fixed costs $71,000. Management is considering the
following independent courses of action to increase net
income.
Compute the net income to be earned under each alternative.
1. Increase selling price by 10% with no change in
total variable costs or sales volume.
Net income
$_______________
2. Reduce variable costs to 57% of
sales.
Net income
$_______________
3. Reduce fixed costs...
Barnes Company reports the following operating results for the month of August: sales $300,000 (units 5,000);...
Barnes Company reports the following operating results for the
month of August: sales $300,000 (units 5,000); variable costs
$225,000; and fixed costs $71,400. Management is considering the
following independent courses of action to increase net
income.
Compute the net income to be earned under each alternative.
1. Increase selling price by 10% with no change in
total variable costs or sales volume.
Net income
$enter the net income that will be earned under the first
Alternative
2. Reduce variable costs...
Exercise 18-15 Yams Company reports the following operating results for the month of August: sales $390,000...
Exercise 18-15
Yams Company reports the following operating results for the
month of August: sales $390,000 (units 5,000), variable costs
$256,000, and fixed costs $91,000. Management is considering the
following independent courses of action to increase net
income.
1. Increase selling price by 14% with no change in total
variable costs or units sold.
2. Reduce variable costs to 57% of sales.
Compute the net income to be earned under each alternative. (Round
intermediate calculations to 2 decimal places e.g....
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