1. Ashley sells a hammer for $ 50. Its variable expense is $ 35 per unit...
1. Ashley sells a hammer for $ 50. Its variable expense is $ 35 per unit and its fixed expense is $ 60,000. The current volume is 5,000 units. Each question is independent.
a. Find the CM ratio, the degree of operating leverage, and the break-even point in dollars.
b. Compute the percentage change of operating income when the sales for the next period increase by 25%.
c. If the variable expense decreases by $ 5, find the CM ratio and the break-even sales in the unit.
d. When the fixed expense changes to $ 80,000, find the sales volume to maintain the current operating income.
e. When the fixed expense decreases to $ 40,000 and the variable expense increases to $ 42, how many units should be sold to attain $ 80,000 of operating income?
Homework Answers
a) CM ratio = 15/50 = 30%
Operating leverage = Contribution margin/Operating income = 75000/15000 = 5 Times
Break even sales = 60000/.30 = $200000
b) Operating income increase by = 25*5 = 125%
c) CM ratio = 20/50 = 40%
Break even unit = 60000/20 = 3000 Units
d) Sales volume = (80000+15000)/15 = 6333 Units
e) Required unit = (40000+80000)/8 = 15000 Units
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1. Ashley sells a hammer for $ 50. Its variable expense is $ 35
per unit...
Chapter 5: Applying Excel Data Unit sales 20,000 units $60 Selling price per unit Variable expenses...
Chapter 5: Applying Excel Data Unit sales 20,000 units $60 Selling price per unit Variable expenses per unit Fixed expenses per unit $45 per unit $240,000 Enter a formula into each of the cells marked with a ? below Review Problem: CVP Relations hips Compute the CM ratio and variable expense ratio Selling price per unit Variable expenses per unit Contribution margin per unit ? per unit ? per unit ? per unit CM ratio Variable expense ratio ? Compute...
1.What is the contribution margin per unit? 2.What is the contribution margin ratio? 3.What is the...
1.What is the contribution margin per unit?
2.What is the contribution margin ratio?
3.What is the variable expense ratio?
4.If sales increase to 1,001 units, what would be the increase
in net operating income?
5.If sales decline to 900 units, what would be the net
operating income?
6.If the selling price increases by $2.50 per unit and the
sales volume decreases by 100 units, what would be the net
operating income?
7.If the variable cost per unit increases by $1.50,...
Exercise 10-9 Computing Break-Even Plus Target Volume Teton, Inc. sells its only product for $50 per unit. Fixed...
Exercise 10-9 Computing Break-Even Plus Target Volume Teton, Inc. sells its only product for $50 per unit. Fixed expenses total $800,000 per year. Variable expenses are $1,000,000 when 40 40,000 units are sold units must be sold to earn a net operating income of $75,000 units How MacBook Air FVO Exercise 10-8 Computing Break-Even The sales price per unit is $13 for the Voyageur Company's only product. The variable cost per unit is $5, In 2016, the company sold 80,000...
1. Determine the break-even point. 2 Compute the margin of safety and explain its significance. 3....
1. Determine the break-even point. 2 Compute the margin of safety and explain its significance. 3. Compute the degree of operating leverage at a particular level of sales and explain how it can be used to predict changes in net operating income 5.3 CVP Analysis - Excel Given the following information complete a Cve analysis 2 for JPL, Inc.: 4 Unit sales 5 Selling price per unit 6 Variable expenses per unit 7 Fixed expenses 11,200 units S75 per unit...
7.If the variable cost per unit increases by $1, spending on advertising increases by $1,250, and...
7.If the variable cost per unit increases by $1, spending on
advertising increases by $1,250, and unit sales increase by 150
units, what would be the net operating income?
8.What is the break-even point in unit sales?
9.What is the break-even point in dollar sales?
10.How many units must be sold to achieve a target profit of
$8,400?
11.What is the margin of safety in dollars?
12.What is the margin of safety percentage?
13.What is the degree of operating leverage?...
Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses...
Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows: Sales $ 2,080,000 Variable expenses 1,040,000 Contribution margin 1,040,000 Fixed expenses 180,000 Net operating income $ 860,000 Required: Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point...
Saved Data concerning Follick Corporation's single product appear below Selling price per unit variable expense per...
Saved Data concerning Follick Corporation's single product appear below Selling price per unit variable expense per unit Fixed expense per month s 180.00 68.40 $130,200 The break-even in monthly dollar sales is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice $210,000 $289,800 $130,200 $420,000 Cubie Corporation has provided the following data concerning its only product Selling price Current sales Break-even sales s 111 per unit 9,500 units 8,170 units What is the margin of safety in...
Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $120 per unit. Variable expenses...
Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $120 per unit. Variable expenses are $60.00 per unit, and fixed expenses total $160,000 per year. Its operating results for last year were as follows: Rectangular Snip Sales Variable expenses Contribution margin Fixed expenses Net operating income $ 3,240,000 1,620,000 1,620,000 160,000 $ 1,460,000 Required: Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the...
Feather Friends, Inc., distributes a high quality wooden birdhouse that sells for $80 per unit. Variable...
Feather Friends, Inc., distributes a high quality wooden birdhouse that sells for $80 per unit. Variable expenses are $1000 per unit, and fixed expenses total $200,000 per year. Its operating results for last year were as follows: Sales Variable expenses Contribution martin Fixed expenses Net operating Incore $ 2,080,000 1,040,000 1.040,000 200.000 840,000 int ences Required: Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the...
please use excel to answer and show formulas thank you!! Chapter 5: Applying Excel Data Unit...
please use excel to answer and show formulas thank you!!
Chapter 5: Applying Excel Data Unit sales Selling price per unit Variable expenses per unit Fixed expenses 40,000 units $50 per unit $35 per unit $570,000 Enter a formula into each of the cells marked with a ? below Review Problem: CVP Relationships Compute the CM ratio and variable expense ratio Selling price per unit Variable expenses per unit Contribution margin per unit $50 per unit 35 per unit $15...
Chapter 5: Applying Excel Data Unit sales 20,000 units $60 Selling price per unit Variable expenses per unit Fixed expenses per unit $45 per unit $240,000 Enter a formula into each of the cells marked with a ? below Review Problem: CVP Relations hips Compute the CM ratio and variable expense ratio Selling price per unit Variable expenses per unit Contribution margin per unit ? per unit ? per unit ? per unit CM ratio Variable expense ratio ? Compute...
1.What is the contribution margin per unit?
2.What is the contribution margin ratio?
3.What is the variable expense ratio?
4.If sales increase to 1,001 units, what would be the increase
in net operating income?
5.If sales decline to 900 units, what would be the net
operating income?
6.If the selling price increases by $2.50 per unit and the
sales volume decreases by 100 units, what would be the net
operating income?
7.If the variable cost per unit increases by $1.50,...
Exercise 10-9 Computing Break-Even Plus Target Volume Teton, Inc. sells its only product for $50 per unit. Fixed expenses total $800,000 per year. Variable expenses are $1,000,000 when 40 40,000 units are sold units must be sold to earn a net operating income of $75,000 units How MacBook Air FVO Exercise 10-8 Computing Break-Even The sales price per unit is $13 for the Voyageur Company's only product. The variable cost per unit is $5, In 2016, the company sold 80,000...
1. Determine the break-even point. 2 Compute the margin of safety and explain its significance. 3. Compute the degree of operating leverage at a particular level of sales and explain how it can be used to predict changes in net operating income 5.3 CVP Analysis - Excel Given the following information complete a Cve analysis 2 for JPL, Inc.: 4 Unit sales 5 Selling price per unit 6 Variable expenses per unit 7 Fixed expenses 11,200 units S75 per unit...
7.If the variable cost per unit increases by $1, spending on
advertising increases by $1,250, and unit sales increase by 150
units, what would be the net operating income?
8.What is the break-even point in unit sales?
9.What is the break-even point in dollar sales?
10.How many units must be sold to achieve a target profit of
$8,400?
11.What is the margin of safety in dollars?
12.What is the margin of safety percentage?
13.What is the degree of operating leverage?...
Saved Data concerning Follick Corporation's single product appear below Selling price per unit variable expense per unit Fixed expense per month s 180.00 68.40 $130,200 The break-even in monthly dollar sales is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice $210,000 $289,800 $130,200 $420,000 Cubie Corporation has provided the following data concerning its only product Selling price Current sales Break-even sales s 111 per unit 9,500 units 8,170 units What is the margin of safety in...
Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $120 per unit. Variable expenses are $60.00 per unit, and fixed expenses total $160,000 per year. Its operating results for last year were as follows: Rectangular Snip Sales Variable expenses Contribution margin Fixed expenses Net operating income $ 3,240,000 1,620,000 1,620,000 160,000 $ 1,460,000 Required: Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the...
Feather Friends, Inc., distributes a high quality wooden birdhouse that sells for $80 per unit. Variable expenses are $1000 per unit, and fixed expenses total $200,000 per year. Its operating results for last year were as follows: Sales Variable expenses Contribution martin Fixed expenses Net operating Incore $ 2,080,000 1,040,000 1.040,000 200.000 840,000 int ences Required: Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the...
please use excel to answer and show formulas thank you!!
Chapter 5: Applying Excel Data Unit sales Selling price per unit Variable expenses per unit Fixed expenses 40,000 units $50 per unit $35 per unit $570,000 Enter a formula into each of the cells marked with a ? below Review Problem: CVP Relationships Compute the CM ratio and variable expense ratio Selling price per unit Variable expenses per unit Contribution margin per unit $50 per unit 35 per unit $15...
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