Question
In: Accounting
Revenue 80,000 Variable Costs 45,000 Contribution Margin 35,000 Fixed Cost 15,000 Pre-tax Income 20,000 Income Taxes...
Revenue 80,000
Variable Costs 45,000
Contribution Margin 35,000
Fixed Cost 15,000
Pre-tax Income 20,000
Income Taxes (25%) 5,000
After-Tax Income 15,000
1. What is the Breakeven level of revenue?
2. What is the Margin of Safety of revenues?
3. If Fixed Cost were reduced by 10%, what would be the new breakeven revenue?
4. Given the current cost structure (ie. unchanged Fixed and Variable costs), how much revenue would be required to generate 50% more after-tax income?
5. Provide a revised Contribution Income Statement assuming this company achieves the higher level of after-tax revenue described in question 4.
Please show formulas. Thank you!
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Sales (10,000units) $ 70,000 Less variable costs (35,000) Contribution margin $ 35,000 Less fixed costs (32,500)...
Sales (10,000units) $ 70,000 Less variable costs (35,000)
Contribution margin $ 35,000 Less fixed costs (32,500) Net income $
2,500 Requirements: 1. Compute Break-even point in units and
explain what the number that you calculated means. 2. Compute
break-even point in sales volume (in dollar) and explain what the
number that you calculated means. 3. How much sales should be in
order to earn a before tax profit of $15000.
Contribution Income Statement Sales (16,000 units) ……………………….. 128,000 Variable expenses ……………………… 80,000 Contribution Margin ………………… 48,000...
Contribution Income Statement
Sales (16,000 units) ………………………..
128,000
Variable expenses ………………………
80,000
Contribution Margin …………………
48,000
Fixed expenses …………………………
12,000
Net Operating Income ……………….
36,000
Jackpot company sells a single product, has provided its
contribution format income statement for June.
Required:
Prepare Contribution Income
Statement assuming that the business expects an increase
in its total sales (as revenue) by 10% and decrease in variable
cost per unit by $3. (2.5 marks)
Refer to the original data, how much is the...
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.
$
2. Sooner Industries charges a price of $98 and
has fixed cost of $476,500. 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 115,000 units and has fixed cost of $346,800. The variable
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...
Contribution Margin Analysis: We calculate contribution margin by taking our sales revenue less our variable costs....
Contribution Margin Analysis:
We calculate
contribution margin by taking our sales revenue less our variable
costs. This basically tells us the portion of our sales that are
available to cover the fixed cost of the business.
Contribution margin
per unit is especially useful. We compute this by taking our sales
revenues per unit less our variable cost per unit. With this, we
can easily compute our break-even point.
Dog Day Care
Pricing at $18 per dog per day, you can...
Contribution margin is: A. the excess of sales revenue over variable cost B. another...
Contribution margin is:
A. the excess
of sales revenue over variable cost
B. another term
for volume in the "cost-volume-profit" analysis
C. profit
D. the same as
sales revenue
Salim’s fixed costs are RM41, 500, the variable cost is RM12
per unit. If Salim sells the product for RM22 per unit, the
breakeven point is:
A. 4,150
units
B. 8,300
units
C. 2,075
units
D. 6,225
units
The fixed costs of Juara...
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