Homework Answers
Increase (Decrease) in operating income
= Avoidable fixed cost - Contribution margin lost
= 52,000 - 45,000
= Increase by 7000
Option B
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QuestIon Freip Contribution margin income statement data for the most recent...
All About Farm Animals has two product lines: Horse feed and Cow feed. Contribution margin income...
All About Farm Animals has two product lines: Horse feed and Cow feed. Contribution margin income statement data for the most recent year follow: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Total Horse Feed $405,000 $320,000 $65,000 $25,000 $340,000 $295,000 $99,000 $47,000 $241,000 $248,000 Cow Feed $85,000 $40,000 $45,000 $52,000 $17,000) Assuming total fixed costs remain unchanged, how would discontinuing the Cow food line affect operating income? Decrease in total operating income of $437,000 Increase in...
Engberg Company installs lawn sod in home yards. The company’s most recent monthly contribution format income...
Engberg Company installs lawn sod in home yards. The company’s most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 130,000 100 % Variable expenses 52,000 40 % Contribution margin 78,000 60 % Fixed expenses 19,000 Net operating income $ 59,000 Required: 1. What is the company’s degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 15% increase in sales. 3. Construct a new contribution...
Engberg Company installs lawn sod in home yards. The company’s most recent monthly contribution format income...
Engberg Company installs lawn sod in home yards. The company’s most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 130,000 100 % Variable expenses 52,000 40 % Contribution margin 78,000 60 % Fixed expenses 16,000 Net operating income $ 62,000 Required: 1. What is the company’s degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 29% increase in sales. 3. Construct a new contribution...
Given the following contribution margin income statement Sales (15000 units 35 $/units)
Given the following contribution margin income statement Sales (15000 units 35 $/units) 525,000 Variable cost: Production 22.5 $/unit 337,500 Selling expenses 1.5 $/unit 22,500 360,000 Contribution margin 165,000 Fixed cost Manufacturing 55,000 Selling and administrative 78,000 133,000 Net operating income 32,000 What is the effect on the NOI in the following Scenarios? An increase in selling VC by 30% per unit. Decreasing the selling price to 34.5 and generating 1500 more sold units Modifying the machine that would...
Whirly Corporation's contribution format income statement for the most recent month is shown below: Sales (9,000...
Whirly Corporation's contribution format income statement for the most recent month is shown below: Sales (9,000 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $ 297,000 171,000 126,000 55,100 $ 70,900 Per Unit $ 33.00 - 19.00 $ 14.00 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 90 units? 2. What would be the revised net operating income per month if the sales...
Boots Plus has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year fo...
Boots Plus has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow. Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Total $500,000 395,000 105,000 76,000 $29,000 Hiking $360,000 275,000 85,000 38,000 $47.000 Fashion $140,000 120,000 20,000 38,000 $(18,000) If $25,000 of fixed costs will be eliminated by discontinuing the Fashion line, how will operating income be affected? O A. Increase $65,000 OB. Increase $36,000 OC. Increase $5,000 OD. Decrease...
Problem 2-20 Points: The CGC Computer Products most recent contribution margin income statement is shown on...
Problem 2-20 Points: The CGC Computer Products most recent contribution margin income statement is shown on the worksheet. In each of the following scenarios, calculate the values indicated. (CALCULATE ALL CHANGES FROM THE BEGINNING SCENARO OF NUMBERS-hint: it may be easier to copy the base income statement and paste to all other scenarios) A. The breakeven point in dollars and units. B. The sales volume increases by 30% and the price decreases by $0.50 per unit. c. The selling price...
Whirly Corporation's contribution format Income statement for the most recent month is shown below. Sales (10,000...
Whirly Corporation's contribution format Income statement for the most recent month is shown below. Sales (10,000 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $ 350,000 200,000 150,000 135,000 $ 15,000 Per Unit $35.00 20.00 $15.00 Required: (Consider each case independently): 1. What would be the revised net operating Income per month of the sales volume Increases by 100 units? 2. What would be the revised net operating Income per month if the sales volume decreases by...
Miller Company’s contribution format income statement for the most recent month is shown below: Total Per...
Miller Company’s
contribution format income statement for the most recent month is
shown below:
Total
Per Unit
Sales (39,000 units)
$
195,000
$
5.00
Variable
expenses
78,000
2.00
Contribution
margin
117,000
$
3.00
Fixed
expenses
48,000
Net operating
income
$
69,000
Required:
(Consider each case
independently):
1. What is the revised
net operating income if unit sales increase by 18%?
2. What is the revised
net operating income if the selling price decreases by $1.50 per
unit and the number...
please answer A, B, and C Tanner Company's most recent contribution margin income statement is presented...
please answer A, B, and C
Tanner Company's most recent contribution margin income statement is presented below: Sales Variable expenses Contribution margin Fixed expenses Net operating loss $75,000 45,000 30,000 36,000 ($6,000) The company sells its only product for $15 per unit. Required: a. Compute the company's break-even point inin units sold. b. How many units would have to be sold to earn a target profit of $9,000? C. The sales manager is convinced that a $6,000 increase in adverstising...
All About Farm Animals has two product lines: Horse feed and Cow feed. Contribution margin income statement data for the most recent year follow: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Total Horse Feed $405,000 $320,000 $65,000 $25,000 $340,000 $295,000 $99,000 $47,000 $241,000 $248,000 Cow Feed $85,000 $40,000 $45,000 $52,000 $17,000) Assuming total fixed costs remain unchanged, how would discontinuing the Cow food line affect operating income? Decrease in total operating income of $437,000 Increase in...
Whirly Corporation's contribution format income statement for the most recent month is shown below: Sales (9,000 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $ 297,000 171,000 126,000 55,100 $ 70,900 Per Unit $ 33.00 - 19.00 $ 14.00 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 90 units? 2. What would be the revised net operating income per month if the sales...
Boots Plus has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow. Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Total $500,000 395,000 105,000 76,000 $29,000 Hiking $360,000 275,000 85,000 38,000 $47.000 Fashion $140,000 120,000 20,000 38,000 $(18,000) If $25,000 of fixed costs will be eliminated by discontinuing the Fashion line, how will operating income be affected? O A. Increase $65,000 OB. Increase $36,000 OC. Increase $5,000 OD. Decrease...
Problem 2-20 Points: The CGC Computer Products most recent contribution margin income statement is shown on the worksheet. In each of the following scenarios, calculate the values indicated. (CALCULATE ALL CHANGES FROM THE BEGINNING SCENARO OF NUMBERS-hint: it may be easier to copy the base income statement and paste to all other scenarios) A. The breakeven point in dollars and units. B. The sales volume increases by 30% and the price decreases by $0.50 per unit. c. The selling price...
Whirly Corporation's contribution format Income statement for the most recent month is shown below. Sales (10,000 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $ 350,000 200,000 150,000 135,000 $ 15,000 Per Unit $35.00 20.00 $15.00 Required: (Consider each case independently): 1. What would be the revised net operating Income per month of the sales volume Increases by 100 units? 2. What would be the revised net operating Income per month if the sales volume decreases by...
Miller Company’s
contribution format income statement for the most recent month is
shown below:
Total
Per Unit
Sales (39,000 units)
$
195,000
$
5.00
Variable
expenses
78,000
2.00
Contribution
margin
117,000
$
3.00
Fixed
expenses
48,000
Net operating
income
$
69,000
Required:
(Consider each case
independently):
1. What is the revised
net operating income if unit sales increase by 18%?
2. What is the revised
net operating income if the selling price decreases by $1.50 per
unit and the number...
please answer A, B, and C
Tanner Company's most recent contribution margin income statement is presented below: Sales Variable expenses Contribution margin Fixed expenses Net operating loss $75,000 45,000 30,000 36,000 ($6,000) The company sells its only product for $15 per unit. Required: a. Compute the company's break-even point inin units sold. b. How many units would have to be sold to earn a target profit of $9,000? C. The sales manager is convinced that a $6,000 increase in adverstising...
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