Question
In: Accounting
Creswell Corporation's fixed monthly expenses are $29,000 and its contribution margin ratio is 56%. Assuming that...
Creswell Corporation's fixed monthly expenses are $29,000 and its contribution margin ratio is 56%. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $95,000?
Multiple Choice
-
$53,200
-
$66,000
-
$12,800
-
$24,200
Solutions
Expert Solution
| Solution: | ||
| CALCULATION OF NET OPEREATING INCOME | ||
| Sales | $ 95,000 | |
| Less: Variable Expenses (44%) | $ 41,800 | |
| Contribution Margin (56%) | $ 53,200 | |
| Less: Fixed Cost | $ 29,000 | |
| Net Operating Income | $ 24,200 | |
| Answer = Net Operating Income = Option 4 = $ 24,200 | ||
ekkarill92 answered 1 year agoRelated Solutions
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Multiple Choice
$269,750
$107,900
$230,000
$39,750
$190,250
Madison Corporation sells three products (M, N, and O) in the
following mix: 3:1:2. Unit price and cost data are:
M
N
O
Unit sales price
$
13
$
10
$
12
Unit variable costs...
Price, Variable Cost per Unit, Contribution Margin, Contribution Margin Ratio, Fixed Expense For each of the...
Price, Variable Cost
per Unit, Contribution Margin, Contribution Margin Ratio, Fixed
Expense
For each of the
following independent situations, calculate the amount(s)
required.
Required:
1. At
the break-even point, Jefferson Company sells 85,000 units and has
fixed cost of $348,600. The variable cost per unit is $0.35. What
price does Jefferson charge per unit? Note: Round to the
nearest cent.
$
2.
Sooner Industries charges a price of $127 and has fixed cost of
$360,500. Next year, Sooner expects to...
Price, Variable Cost per Unit, Contribution Margin, Contribution Margin Ratio, Fixed Expense For each of the...
Price, Variable Cost per Unit, Contribution Margin, Contribution
Margin Ratio, Fixed Expense
For each of the following independent situations, calculate the
amount(s) required.
Required:
1. At the break-even point, Jefferson Company
sells 95,000 units and has fixed cost of $349,700. The variable
cost per unit is $0.15. What price does Jefferson charge per unit?
Note: Round to the nearest cent.
$
2. Sooner Industries charges a price of $129
and has fixed cost of $421,000. Next year, Sooner expects to...
Price, Variable Cost per Unit, Contribution Margin, Contribution Margin Ratio, Fixed Expense For each of the...
Price, Variable Cost per Unit, Contribution Margin, Contribution
Margin Ratio, Fixed Expense
For each of the following independent situations, calculate the
amount(s) required.
Required:
1. At the break-even point, Jefferson Company
sells 85,000 units and has fixed cost of $351,900. The variable
cost per unit is $0.30. What price does Jefferson charge per unit?
Note: Round to the nearest cent.
$
2. Sooner Industries charges a price of $136
and has fixed cost of $391,500. Next year, Sooner expects to...
Price, Variable Cost per Unit, Contribution Margin, Contribution Margin Ratio, Fixed Expense For each of the...
Price, Variable Cost per Unit, Contribution Margin, Contribution
Margin Ratio, Fixed Expense
For each of the following independent situations, calculate the
amount(s) required.
Required:
1. At the break-even point, Jefferson Company
sells 85,000 units and has fixed cost of $346,500. The variable
cost per unit is $0.10. What price does Jefferson charge per unit?
Note: Round to the nearest cent.
$
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has fixed cost of $476,500. Next year, Sooner expects to...
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For each of the following independent situations, calculate the
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Required:
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cost per unit is $0.10. What price does Jefferson charge per unit?
Note: Round to the nearest cent.
$
2. Sooner Industries charges a price of $116
and has fixed cost of $395,500. Next year, Sooner expects to...
Price, Variable Cost per Unit, Contribution Margin, Contribution Margin Ratio, Fixed Expense For each of the...
Price, Variable Cost per Unit, Contribution Margin, Contribution
Margin Ratio, Fixed Expense
For each of the following independent situations, calculate the
amount(s) required.
Required:
1. At the break-even point, Jefferson Company
sells 85,000 units and has fixed cost of $349,900. The variable
cost per unit is $0.20. What price does Jefferson charge per unit?
Round to the nearest cent.
$
2. Sooner Industries charges a price of $93 and
has fixed cost of $481,500. Next year, Sooner expects to sell...
If total fixed costs is $100,000, contribution per unit is $25 and the contribution margin ratio...
If total fixed costs is $100,000, contribution per unit is $25
and the contribution margin ratio is 40% and the company desired
target profit of $25,000, what are the values of the followings
(see page 97):
a) Break-Even-Point in unit = _________________?
b) Break-Even-Point in sales
dollars________________________?
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