Carbex, Inc., produces cutlery sets out of high-quality wood and steel. The company makes a Standard set and a Deluxe set and sells them to retail department stores throughout the country. The Standard set sells for $100, and the Deluxe set sells for $115. The variable expenses associated with each set are given below. Variable production costs Sales commissions (35% of sales price) The company's fixed expenses each month are: Advertising Depreciation Administrative April May Mary Parsons, the financial vice president, watches sales commissions carefully and has noted that they have risen steadily over the last year. For this reason, she was shocked to find that even though sales have increased, profits for the current month-May-are down substantially from April. Sales, in sets, for the last two months are given below: Req 1A Total Standard Deluxe 6,000 4,000 10,000 3,000 7,000 10,000 Required: 1-a. Prepare contribution format income statements for April. 1-b. Prepare contribution format income statements for May. 3-a. Compute the break-even point in dollar sales for April. 3-b. Would the break-even point in May be higher or lower than the break-even point in April? $ 125,000 $ 27,700 $ 73,000 Complete this question by entering your answers in the tabs below. Variable expenses: Req 1B Fixed expenses: Total variable expenses Total fixed expenses Standard $ 35.00 $ 35.00 Req 3A Prepare contribution format income statements for April. (Round your "Percentage" answers to 1 decimal place (i.e. .1234 should be entered as 12.3).) Req 3B Amount Carbex, Inc. Income Statement For April Standard % Deluxe $ 50.00 $ 40.25 % % % % % % % < Req 1A Deluxe Amount % % % % % % % % Amount Req 1B > Total % % % % % % % %
Carbex, Inc., produces cutlery sets out of high-quality wood and steel. The company makes a Standard set and a Deluxe set and sells them to retail department stores throughout the country. The Standard set sells for $100, and the Deluxe set sells for $115. The variable expenses associated with each set are given below. Variable production costs Sales commissions (35% of sales price) The company's fixed expenses each month are: Advertising Depreciation Administrative April May Mary Parsons, the financial vice president, watches sales commissions carefully and has noted that they have risen steadily over the last year. For this reason, she was shocked to find that even though sales have increased, profits for the current month-May-are down substantially from April. Sales, in sets, for the last two months are given below: Req 1A Total Standard Deluxe 6,000 4,000 10,000 3,000 7,000 10,000 Required: 1-a. Prepare contribution format income statements for April. 1-b. Prepare contribution format income statements for May. 3-a. Compute the break-even point in dollar sales for April. 3-b. Would the break-even point in May be higher or lower than the break-even point in April? $ 125,000 $ 27,700 $ 73,000 Complete this question by entering your answers in the tabs below. Variable expenses: Req 1B Fixed expenses: Total variable expenses Total fixed expenses Standard $ 35.00 $ 35.00 Req 3A Prepare contribution format income statements for April. (Round your "Percentage" answers to 1 decimal place (i.e. .1234 should be entered as 12.3).) Req 3B Amount Carbex, Inc. Income Statement For April Standard % Deluxe $ 50.00 $ 40.25 % % % % % % % < Req 1A Deluxe Amount % % % % % % % % Amount Req 1B > Total % % % % % % % %
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 5EA: Maple Enterprises sells a single product with a selling price of $75 and variable costs per unit of...
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