Question
In: Accounting
In the year 2008, Wiggins Processing Company had the following contribution income statement: WIGGINS PROCESSING COMPANY...
In the year 2008, Wiggins Processing Company had the following contribution income statement:
| WIGGINS
PROCESSING COMPANY Contribution Income Statement For the Year 2008 |
||
|---|---|---|
| Sales | $1,000,000 | |
| Variable costs | ||
| Cost of goods sold | $420,000 | |
| Selling and administrative | 200,000 | (620,000) |
| Contribution margin | 380,000 | |
| Fixed Costs | ||
| Factory overhead | 186,000 | |
| Selling and administrative | 80,000 | (266,000) |
| Before-tax profit | 114,000 | |
| Income taxes (37%) | (42,180) | |
| After-tax profit | $71,820 | |
HINT: Round contribution margin ratio to two decimal places for your calculations below.
(a) Determine the annual break-even point in sales
dollars.
$____
(b) Determine the annual margin of safety in sales dollars.
$_____
(c) What is the break-even point in sales dollars if management
makes a decision that increases fixed costs by $76,000?
(d) With the current cost structure, including fixed costs of
$266,000, what dollar sales volume is required to provide an
after-tax net income of $250,000?
Do not round until your final answer. Round your answer to the
nearest dollar.
$_____
(e) Prepare an abbreviated contribution income statement to verify
that the solution to part (d) will provide the desired after-tax
income.
Round your answers to the nearest dollar. Use rounded answers for subsequent calculations. Do not use negative signs with any of your answers.
| WIGGINS
PROCESSING COMPANY Income Statement For the Year 200 |
||
|---|---|---|
| Sales | $____ | |
| Variable costs | _______ | |
| Contribution margin | _____ | |
| Fixed costs | _______ | |
| Net income before taxes | ______ | |
| Income taxes (37%) | ______ | |
| Net income after taxes | $_____ | |
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Multiple Product Planning with Taxes In the year 2008, Wiggins Processing Company had the following contribution...
Multiple Product Planning with Taxes
In the year 2008, Wiggins Processing Company had the following
contribution income statement:
WIGGINS
PROCESSING COMPANY
Contribution Income Statement
For the Year 2008
Sales
$1,000,000
Variable costs
Cost of goods sold
$460,000
Selling and administrative
200,000
(660,000)
Contribution margin
340,000
Fixed Costs
Factory overhead
192,000
Selling and administrative
80,000
(272,000)
Before-tax profit
68,000
Income taxes (38%)
(25,840)
After-tax profit
$42,160
HINT: Round the contribution margin ratio to two decimal places
for your calculations below.
(a)...
Multiple Product Planning with Taxes In the year 2008, Wiggins Processing Company had the following contribution...
Multiple Product Planning with Taxes
In the year 2008, Wiggins Processing Company had the following
contribution income statement:
WIGGINS PROCESSING COMPANY
Contribution Income Statement
For the Year 2008
Sales
$1,000,000
Variable costs
Cost of goods sold
$400,000
Selling and administrative
200,000
(600,000)
Contribution margin
400,000
Fixed Costs
Factory overhead
180,000
Selling and administrative
80,000
(260,000)
Before-tax profit
140,000
Income taxes (40%)
(56,000)
After-tax profit
$84,000
HINT: Round the contribution margin ratio to
two decimal places for your calculations below.
(a)...
Below is the 2009 contribution income statement of a company. Contribution Income Statement For Year Ended...
Below is the 2009 contribution income statement of a
company.
Contribution Income Statement
For Year Ended December 31, 2009
Sales (12,000 units)
$1,440,000
Less variable costs
Cost of goods sold
$480,000
Selling and administrative
132,000
(612,000)
Contribution margin
828,000
Less fixed costs
Manufacturing overhead
510,000
Selling and administrative
220,000
(730,000)
Net income
$98,000
During the coming year, the company expects an increase in
variable manufacturing costs of $8 per unit and in fixed
manufacturing costs of $72,000.
(a) If sales...
Income Statement - Cover-to-Cover Cover-to-Cover Company Contribution Margin Income Statement For the Year Ended December 31,...
Income Statement - Cover-to-Cover
Cover-to-Cover Company
Contribution Margin Income Statement
For the Year Ended December 31, 20Y8
Sales
$374,000
Variable costs:
Manufacturing expense
$224,400
Selling expense
18,700
Administrative expense
56,100
(299,200)
Contribution margin
$74,800
Fixed costs:
Manufacturing expense
$5,000
Selling expense
4,000
Administrative expense
9,700
(18,700)
Operating income
$56,100
Income Statement - Biblio Files
Biblio Files Company
Contribution Margin Income Statement
For the Year Ended December 31, 20Y8
Sales
$374,000
Variable costs:
Manufacturing expense
$149,600
Selling expense
14,960
Administrative expense...
The contribution format income statement for The Company for last year is given below: Total Unit...
The contribution format income statement for The Company for
last year is given below:
Total
Unit
Sales
$
994,000
$
49.70
Variable expenses
596,400
29.82
Contribution margin
397,600
19.88
Fixed expenses
319,600
15.98
Net operating income
78,000
3.90
Income taxes @ 40%
31,200
1.56
Net income
$
46,800
$
2.34
The company had average operating assets of $510,000 during the
year.
Required:
1. Compute the company’s return on investment (ROI) for the
period using the ROI formula stated in terms...
Ansara Company had the following abbreviated income statement for the year ended December 31, 20Y2: (in...
Ansara Company had the following abbreviated income statement
for the year ended December 31, 20Y2: (in millions) Sales $18,769
Cost of goods sold $15,471 Selling, administrative, and other
expenses 2,049 Total expenses $17,520 Income from operations $1,249
Assume that there were $3,860 million fixed manufacturing costs and
$1,170 million fixed selling, administrative, and other costs for
the year. The finished goods inventories at the beginning and end
of the year from the balance sheet were as follows: January 1
$2,354...
Ansara Company had the following abbreviated income statement for the year ended December 31, 20Y2: (in...
Ansara Company had the following abbreviated income statement
for the year ended December 31, 20Y2: (in millions) Sales $18,769
Cost of goods sold $15,471 Selling, administrative, and other
expenses 2,049 Total expenses $17,520 Income from operations $1,249
Assume that there were $3,860 million fixed manufacturing costs and
$1,170 million fixed selling, administrative, and other costs for
the year. The finished goods inventories at the beginning and end
of the year from the balance sheet were as follows: January 1
$2,354...
Contribution Margin and Contribution Margin Ratio For a recent year, Wicker Company-owned restaurants had the following...
Contribution Margin and Contribution Margin Ratio
For a recent year, Wicker Company-owned restaurants had the
following sales and expenses (in millions):
Sales
$14,700
Food and packaging
$6,044
Payroll
3,700
Occupancy (rent, depreciation, etc.)
2,416
General, selling, and administrative expenses
2,100
$14,260
Income from operations
$440
Assume that the variable costs consist of food and packaging,
payroll, and 40% of the general, selling, and administrative
expenses.
a. What is Wicker Company's contribution
margin? Round to the nearest million. (Give answer in...
Contribution Margin and Contribution Margin Ratio For a recent year, Wicker Company-owned restaurants had the following...
Contribution Margin and Contribution Margin Ratio
For a recent year, Wicker Company-owned restaurants had the
following sales and expenses (in millions):
Sales : $19,700
Food and Packaging: $7630
Payroll: $5000
Occupancy: $3580
General expenses: $2,900
Total: $19,110
Income from operations: $590
a. What is Wicker Company's contribution margin?
Round to the nearest million. (Give answer in millions of
dollars.)Assume that the variable costs consist of food and
packaging, payroll, and 40% of the general, selling, and
administrative expenses.
b. What...
Contribution Margin and Contribution Margin Ratio For a recent year, McDugal's company-owned restaurants had the following...
Contribution Margin and Contribution Margin Ratio
For a recent year, McDugal's company-owned
restaurants had the following sales and expenses (in millions):
Sales
$27,300
Food and packaging
$7,227
Payroll
7,200
Occupancy (rent, depreciation, etc.)
8,673
General, selling, and admin. expenses
4,200
Other expense
550
Total expenses
(27,850)
Operating income (loss)
$(550)
Assume that the variable costs consist of food and packaging,
payroll, and 40% of the general, selling, and administrative
expenses.
a. What is McDonald's contribution margin?
Enter your answer in...
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