Question
In: Accounting
Use the following information to answer this question: per unit ratio Sales Revenue $250 Variable Costs...
Use the following information to answer this question:
|
per unit |
ratio |
|
|
Sales Revenue |
$250 |
|
|
Variable Costs |
$75 |
30% |
|
Contribution Margin |
$175 |
70% |
Fixed expenses are $910,000 per month. The company is selling 7,000 units. The marketing manager believes that a $65,000 increase in the monthly advertising budget would result in an 8% increase in monthly sales. What is the change on the company's monthly net operating income of this change?
Solutions
Expert Solution
| Present | Anticipated | |
| Contribution Margin | 7,000*$175 = $1,225,000 | (7,000*108%)*$175 = $1,323,000 |
| Less: Fixed expenses | $ 910,000 | $910,000+$65,000 = $975,000 |
| Operating income | $ 315,000 | $ 348,000 |
Increase in net operating income will be: $348,000 - $315,000 = $33,000
You can reach me over comment box, if you have any doubts. please rate this answer
ekkarill92 answered 2 years agoRelated Solutions
Use the following information for questions # of units produced 6,600 Variable Costs per Unit: Direct...
Use the following information for questions
# of units produced
6,600
Variable Costs per Unit:
Direct Materials
$46
Direct Labor
$16
Variable Manufacturing Overhead
$8
Variable Selling & Admin. Expense
$4
Fixed Costs per year:
Fixed Manufacturing Overhead
$234,300
Fixed Selling & Admin
$161,700
The Absorption Costing Unit Product Cost is:
Group of answer choices
$100.20
$105.50
$74
$70
The Variable Costing Unit Product Cost is:
Group of answer choices
$70
$74
$105.50
$100.20
If 6,000 units are sold during...
Given Sales in units 10,000 Variable manufacturing costs per unit 5 Variable administrative costs per unit...
Given
Sales in units
10,000
Variable manufacturing costs per unit
5
Variable administrative costs per unit
2
Fixed manufacturing costs per unit
2
Fixed administrative costs per unit
1
Variable costs
75%
of sales
Selling price per unit?
$2.22
$9.33
$17.50
$20
Given for XM Company the following data for January 20X1.
Direct material purchased and used in production accounted for
$
50000
Units purchased
5000
The standard units
4200
Managers estimate price variance not to exceed +1% of the...
Given the following information: Selling Price (per unit): $10,000 Variable Costs (per unit): $7,000 Fixed Costs:...
Given the following information:
Selling Price (per unit): $10,000
Variable Costs (per unit): $7,000
Fixed Costs: $200,000
Required
Each of these are separate situations:
What is the break-even point in total sales in
dollars?
How many units need to be sold to make a profit of
$20,000?
How many units need to be sold to make a profit of
$20,000 if fixed costs increase from $200,000 to
$250,000?
How many units would they need to sell if they wanted
to...
Given the following information: Selling Price (per unit): $10,000 Variable Costs (per unit): $7,000 Fixed Costs:...
Given the following information:
Selling Price (per unit): $10,000
Variable Costs (per unit): $7,000
Fixed Costs: $200,000
Required
Each of these are separate situations:
What is the break-even point in total sales in
dollars?
How many units need to be sold to make a profit of
$20,000?
How many units need to be sold to make a profit of
$20,000 if fixed costs increase from $200,000 to
$250,000?
How many units would they need to sell if they wanted
to...
Use the following information for questions 1-5: # of units produced 6,600 Variable Costs per Unit:...
Use the following information for questions
1-5:
# of units produced
6,600
Variable Costs per Unit:
Direct Materials
$46
Direct Labor
$16
Variable Manufacturing Overhead
$8
Variable Selling & Admin. Expense
$4
Fixed Costs per year:
Fixed Manufacturing Overhead
$234,300
Fixed Selling & Admin
$161,700
The Absorption Costing Unit Product Cost is:
$100.20
$105.50
$74
$70
The Variable Costing Unit Product Cost is:
$70
$74
$105.50
$100.20
If 6,000 units are sold during the period, total period cost
under variable...
XYZ Company makes 250 widgets. The variable costs are $36.80 per unit and fixed costs are...
XYZ Company makes 250
widgets. The variable costs are $36.80 per unit and fixed costs are
$31.20 per unit; however, $22.60 in fixed costs per unit is
unavoidable. What is the effect on net income if the company
instead buys the widgets from an outside supplier for $47.00 per
unit?
Decrease of $5,250
Increase of $400
Decrease of $400
Increase of $5,250
Sales price per unit for product X is $90. The variable costs per unit and total...
Sales price per unit for product X is $90. The variable costs
per unit and total fixed costs are as follows:
Variable
costs per unit:
Fixed
costs:
Machining
$25
Depreciation
$ 40,000
Packaging
15
Maintenance
31,000
Total
variable $40
Cleaning
9,000
Real estate
tax
5,000
Total
fixed $85,000
Using Contribution Margin technique, calculate Sales Revenue
and Sales Units at Break-Even point.
(b) If the current level of sales is 2,300 units, by
what percentage can sales decrease before the...
Peeler's Smoothie Company has provided the following information: Sales price per unit Variable cost per unit...
Peeler's Smoothie Company has provided the following
information: Sales price per unit Variable cost per unit Fixed
costs per month Calculate the contribution margin ratio. (Round
your answer to two decimal places.)
A. 28.57%
B. 22.22%
C. 20%
D. 77.78%
Benson Company manufactures special metallic materials for
luxury homes that require highly skilled labor. Benson uses
standard costs to prepare its flexible budget. For the first
quarter of the year, direct materials and direct labor standards
for one of their...
A project has a projected sales price of $99 a unit, variable costs per unit of...
A project has a projected sales price of $99 a unit, variable
costs per unit of $58, annual fixed costs of $238,000, and annual
depreciation of $139,000. The tax rate is 22 percent. What is the
contribution margin for an analysis using sales units of 12,800?
Multiple Choice $27.06 $38.97 $22.41 $41.00 $42.64
Sales price P15 per unit Variable costs: SG&A P2 per unit Production P4 per unit Fixed...
Sales price P15 per unit
Variable costs:
SG&A P2 per unit
Production P4 per unit
Fixed costs (total cost incurred for the
year):
SG&A P14,000
Production P20,000
During the first year, Sherrill Corporation manufactured 5,000
units and sold 3,800. There was no beginning or ending
work-in-process inventory.
1. How much income before income taxes would be reported if
Stanley uses absorption costing?
2. How much income before income taxes would be reported if
variable costing was used?
3. Show why...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Do we have any online or offline tool to convert c and cpp programs into MIPS...
- -what is the pH of HCl 0,1M and NaCl 0,1M mixed together solution? -What is the...
- function X=extractDWT(x_train,startS,endS,wStep,wRange) % x_train = input signal % startS = from second % endS = end...
- Do you agree that Social Loafing is similar to Theory X. Give an example to support...
- Computing Cost of Goods Sold and Ending Inventory. Bartov Corporation reports the following beginning inventory and...
- SQL FORMAT (11-13 are completed and correct) -- 11. what are the names of all students...
- You have been hired as a capital budgeting analyst by Advent Sports, a sporting goods firm...
ADVERTISEMENT