4. An unfavorable change in business is remotely possible; in this case, production and sales volume...

4. An unfavorable change in business is remotely possible; in this case, production and sales volume for 2017 could fall to 12,000 units. How much income (or loss) from operations would occur if sales volume falls to this level? (Enter any loss with minus sign.)

Expert Solution

Answer 3.

PHOENIX COMPANY
Forecasted Contribution Margin Income Statement
For the Year Ended Dec 31, 2017
	Units Sold 15,000	Units Sold 18,000	Diference
Sales In Units	15,000.00	18,000.00
Contribution Margin (Per Unit)	111.00	111.00
Contribution Margin	1,665,000.00	1,998,000.00
Fixed Cost	1,331,000.00	1,331,000.00
Operating Income	334,000.00	667,000.00	333,000.00	(Expected Inc. (Dec.) in Operating Income)

	Flexible Budget
	Variable Amt. Per Unit	Total Fixed Cost
Sales	210.00
Variable Cost:
Direct Materials	65.00
Direct Labor	15.00
Machinery Repairs	4.00
Utilities	4.00
Packaging	5.00
Shipping	6.00
Total Variable Cost	99.00

Contribution	111.00

Fixed Cost
Depreciation - Plant Equipment		300,000.00
Utilities		150,000.00
Plant Management Salaries		200,000.00
Sales Salary		235,000.00
Advertising Expense		125,000.00
Salaries		241,000.00
Entertainment Expense		80,000.00
Total Fixed Cost		1,331,000.00

ekkarill92 answered 1 year ago

true/ false 1. When a comparison of static and flexible budgets shows an unfavorable sales volume...

true/ false 1. When a comparison of static and flexible budgets shows an unfavorable sales volume variance, the variable cost volume variances will also be unfavorable. 2. The differences between the standard and actual amounts are called variances. 3. The best standards to include in a standard cost system are ideal standards. 4. If the master budget prepared at a volume level of 20,000 units includes factory rent of $40,000, a flexible budget based on a volume of 21,000 units...

It illustrates possible changes in red blood cell volume resulting in the change in the composition...

It illustrates possible changes in red blood cell volume resulting in the change in the composition of extracellular fluid in a cell that was balanced at 150 mM/L NaCl at time 0 illustrates the volume caused by immersion in a 300 mOsm NaCl solution? represents the volume change caused by immersion in an aqueous solution of 200 mOsm/L of NaCl and 200 mOsm/L glycerol? (NOTE: TWO DIAGRAM

Question 1 The production-volume variance is a component of the sales-volume variance. True False Question 2...

Question 1 The production-volume variance is a component of the sales-volume variance. True False Question 2 Long-run planning and short-run planning are best performed in combination with each other. True False Question 3 Managers can always view a favorable variable overhead spending variance as desirable. True False Question 4 Direct material price variance is likely to be unfavorable if the purchasing manager switched to a lower-price supplier. True False Question 5 Managers must not interpret variances in isolation of each...

QUESTION 1 (30) “Sales volume is argued to be a key factor in whether a business...

QUESTION 1 (30) “Sales volume is argued to be a key factor in whether a business becomes a sustainable enterprise” With this in mind, conduct a viability study for the production of ice to be sold in plastic packs in your immediate and surrounding area, demonstrating whether this idea may lead to viable enterprise. QUESTION 2 (20) Given the viability of the proposed venture in question 1), craft a business plan that amongst other things, will help you manage your...

Case 1 Case 2 Case 3 Case 4 Sales Revenue 100,000 100,000 answer? answer? Contribution Margin...

Case 1 Case 2 Case 3 Case 4 Sales Revenue 100,000 100,000 answer? answer? Contribution Margin 40,000 answer? 20,000 answer? Fixed cost 20,000 anwser? answer? answer? Net Income answer? 5,000 9,000 answer? Variable Cost Ratio answer? answer? answer? .20 Contribution Margin Ratio answer? answer? .50 answer? Break even point (dollars) answer? answer? answer? 25,000 Margin of safety (dollars) answer? answer? answer? 20,000

Cora Corporation produces refrigerator units. The company’s normal production and sales volume of Standard units is...

Cora Corporation produces refrigerator units. The company’s normal production and sales volume of Standard units is 5,500 units per month, and units sell for $970 each. The costs of manufacturing and marketing a Standard model are as follows: Variable manufacturing cost per unit $ 340 Variable marketing cost per unit 90 Fixed product cost 550,000 Fixed period cost 440,000 The company is considering diversifying the product line to include two additional models, Economy and Deluxe, which would sell for $830...

A break-even analysis can be used to determine the amount of sales volume a business needs...

A break-even analysis can be used to determine the amount of sales volume a business needs to start making a profit. List the formula used to conduct a break-even analysis and explain each component. Provide a real-world example of how the break-even analysis and formula could be applied.

Use the following data to prepare a flexible budget for possible sales/production levels of 5,000, 5,500,...

Use the following data to prepare a flexible budget for possible sales/production levels of 5,000, 5,500, and 6,000 units. Make sure to show the contribution margin at each activity level. Sales price $11.00 per unit Variable costs: Manufacturing $6.00 per unit Administrative $1.50 per unit Selling $.50 per unit Fixed costs: Manufacturing $14,000 Administrative $5,000

Please read the case study , then answer the 4 Questions below Sharp Market Change in...

Please read the case study , then answer the 4 Questions below Sharp Market Change in Commodity Prices Take Companies to the Edge: From the Oil Capital of Europe to a Small Mining Town in Australia A significant and sustained drop in commodity prices in 2015–16 (including a significant fall in the price of crude oil and metal commodities, such as iron ore and steel) had major implications for companies operating in this market (for example, oil and gas, mining...

Business Decision Case The sales department of Donovan Manufacturing, Inc. has completed the following sales forecast...

Business Decision Case The sales department of Donovan Manufacturing, Inc. has completed the following sales forecast for the months of January through March 20X1 for its only two products: 50,000 units of J to be sold at $90 each and 30,000 units of K to be sold at $70 each. The desired unit inventories at March 31, 20X1, are 10% of the next quarter’s unit sales forecast, which are 60,000 units of J and 30,000 units of K. The January...

Question