Question

In: Accounting

Remo Company and Angelo Inc. are separate companies that operate in the same industry.

Remo Company and Angelo Inc. are separate companies that operate in the same industry. Following are variable costing income statements for the two companies showing their different cost structures:


Remo Co.
Angelo Inc.
Sales revenue$450,000
$450,000
Less: Variable cost
280,000

215,000
Contribution margin$170,000
$235,000
Less: Fixed cost
50,000

115,000
Net operating income$120,000
$120,000


Required:
Calculate the break-even sales revenue for each company.(Round your "Contribution Margin Ratio" percentage to 2 decimal places (i.e. .1524 = 15.24%) and final answers to 2 decimal places.)

Solutions

Expert Solution

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Remo Company and Angelo Inc. are separate companies that operate in the same industry. Following are...
Remo Company and Angelo Inc. are separate companies that operate in the same industry. Following are variable costing income statements for the two companies showing their different cost structures: Remo Co. Angelo Inc. Sales revenue $ 275,000 $ 275,000 Less: Variable cost 200,000 125,000 Contribution margin $ 75,000 $ 150,000 Less: Fixed cost 35,000 110,000 Net operating income $ 40,000 $ 40,000 Required: Calculate the break-even sales revenue for each company. (Round your "Contribution Margin Ratio" percentage to 2 decimal...
You are analyzing two companies that operate in the same industry. They are both growing capital-intensive...
You are analyzing two companies that operate in the same industry. They are both growing capital-intensive manufacturing companies, Guerr Corp. and Filk Corp. A diligent reading of their annual reports reveals the following: Depreciation Method Average Depreciable Life Leases Guerr Corp. Straight line Machinery: 10 years Significant operating leases for machines extending up to 20 years in length Filk Corp. Double declining balance Machinery: 20 years All leases are capital leases You know that these accounting differences will affect the...
Income statements for two different companies in the same industry are as follows: Trimax Inc Quintex...
Income statements for two different companies in the same industry are as follows: Trimax Inc Quintex Inc Sales $500,000 $500,000 Less: Variable costs 250,000 100,000 Contribution margin 250,000 400,000 Less: Fixed Costs 200,000 350,000 Operating income 50,000 50,000 Required: 1. Compute the degree of operating leverage for each company. 2. Compute the break-even point for each company. Explain why the break-even point for Quintex Inc. is higher. 3. Suppose that both companies experience a 50 percent increase in revenue. Compute...
4. Two companies, X and Y, are competitors in the same industry, but company X is...
4. Two companies, X and Y, are competitors in the same industry, but company X is more efficient at using its resources than company Y. a. If the MRTS is the same in the production processes of both companies, show and discuss how the isoquants will be different for company X than they are for company Y. b. Both companies can hire labor at the same wage, w, but company X is able to pay a lower rent per unit...
if two companies are in the same industry, why would one company be interested in another...
if two companies are in the same industry, why would one company be interested in another company's income statement?
Two companies, X and Y, are competitors in the same industry, but company X is more...
Two companies, X and Y, are competitors in the same industry, but company X is more efficient at using its resources than company Y . a. If the MRTS is the same in the production processes of both companies, show and discuss how the isoquants will be different for company X than they are for company Y. b. Both companies can hire labor at the same wage, w, but company X is able to pay a lower rent per unit...
Two companies, X and Y, are competitors in the same industry, but company X is more...
Two companies, X and Y, are competitors in the same industry, but company X is more efficient at using its resources than company Y. a.         If the MRTS is the same in the production processes of both companies, show and discuss how the isoquants will be different for company X than they are for company Y. b.         Both companies can hire labor at the same wage, w, but company X is able to pay a lower rent per unit on...
Companies A and B operate in the same field, for which the following pieces of information...
Companies A and B operate in the same field, for which the following pieces of information are given in the table below Company A Company B Q (products sold) 150,000 190,000 P (price per product) $80 $70 FC (fixed cost) $550,000 $850,000 VC (variable cost per product) $45 $35 EBIT $2,500,000 $4,200,000 I (interest expenses) $140,000 $750,000 Find the following: a. Degree of operating leverage for both companies, and explain your answers. b. Degree of financial leverage for both companies,...
Suppose that you’re comparing two companies in the same industry that are the same in every...
Suppose that you’re comparing two companies in the same industry that are the same in every way except their profitability. Company A    Company B Shareholder’s Equity              $100m                                  $100m Invested Capital                       $100m                                  $100m Return On Equity                           12%                                 4% Cost of Equity                                  8%                                 8% Begin with a simple comparison: Value each of these companies assuming that the ROEs provided above are sustainable, and that both companies have a sustainable growth rate = 0%. What is the value of...
Calculate the followings for two companies in the same industry of one of the three industry...
Calculate the followings for two companies in the same industry of one of the three industry segments of Consumer staples, materials and energy listed on the Australian Securities Exchange (ASX Top 200). You required to analyse 2018/2019 FY annual reports. Valuation ratios 1.Price to earnings ratio (PE ) 2.Price/earnings to growth ratio 4.Dividend yield Calculate the followings for two companies in the same industry of one of the three industry segments of Consumer staples, materials and energy listed on the...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT