Diamond, Inc.'s most recent contribution margin income statement shows the following:Sales @ $10 per unitLess: Variable expensesContribution marginLess: Fixed expensesOperating income (loss)$160,000(120,000)$ 40,000(50,000)$ (10,000)If Diamond, Inc's advertising costs increased by $5,000, by how much would sales have to increase for the company to achieve an operating income of$4,000?a. $56,000Ob. $42,000c. $76,000Od. $18,000

The objective of the question is to determine by how much the sales of Diamond, Inc. would need to…

Answered: Diamond, Inc.'s most recent…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The following information is for Gable, Inc. and Harlowe, Inc. for the recent year. Harlowe, Inc. $800,000 200,000 600,000 400,000 $200,000 Sales Variable costs. Contribution margin Fixed costs Income from operations Gable, Inc. $800,000 400,000 400,000 200,000 $200,000 What total amount of net income will Harlowe, Inc. earn if it experiences a 10 percent increase in revenue?
Skywalker Corporation reported the following on their contribution format income statement: Sales (12,000 units) $175,000 Less: Variable expenses 100,000 Contribution margin 75,000 Less: Fixed expenses 62,500 Net operating income $ 12,500 What is the contribution margin ratio?
Nocum Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. Sales (3,000 units) Variable expenses Contribution margin Fixed expenses $ 120,000 90,000 30,000 21,000 $ 9,000 Net operating income If sales volumes decline to 2,900 units, the net operating income would be closest to:
Whirlpool Corporation's most recent income statement is shown below: Total Per Unit Sales (10,000 units) 350,000 35.00 Variable Expenses 200,000 20.00 Contribution Margin 150,000 15.00 Fixed Expenses 135,000 Net Operating 15,000 Income Given the following independent situations, what would be the net operating income of Whirlpool Corporation if: 1. Sales Volume increases by 100 units. 2. Sales Volume decreases by 100 units. 3. Sales Volume is 9,000 units.
Kelchner Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. Sales (3,000 units) Variable expenses $ 180,000 108.000 72,000 62,400 9,600 Contribution margin Fixed expenses Net operating income 15. What is the contribution margin ratio for Kelchner Corporation? %24
If a company, sold 37,000 units, total sales were $148,000, total variable expenses were $105,080, and fixed expenses were $38,900. What is the company's contribution margin (CM) ratio? What is the estimated change in the companys net operating income if it can increase sales volum by 525 units and total sales by $2,100. Contribution margin ratio ___________________% Estimated change in net operating income ___________________%
Schister Systems uses the following data in its Cost-Volume-Profit analyses: Total Sales $380,000 Variable expenses $228,000 Contribution margin $152,000 Fixed expenses $116,000 Net operating income $36,000 What is total contribution margin if sales volume increases by 20%?
Information concerning a company's products is as follows: Sales, $300,000; Variable costs, $240,000; Fixed costs, $40,000. Assuming that the company increased sales of the product by 25%, what should the operating income be?
Skeeter Systems uses the following data in its Cost-Volume-Profit analyses: Sales Variable expenses Contribution margin Fixed expenses Net operating income O $80,000 What is total contribution margin if sales volume increases by 20%? O $158,400 O $200,000 Total $ 400,000 280,000 120,000 100,000 O $144,000 $ 20,000
Baker Company has a product that sells for $20 per unit. The variable expenses are $12 per unit, and fixed expenses total $30,000 per year. Compute for the following:a. Total contribution margin at the break-even pointb. Contribution margin ratio for the productc. If total sales increase by $20,000 and fixed expenses remain unchanged, by how much would net operating income be expected to increase?d. The marketing manager wants to increase advertising by $6,000 per year. How many additional units would have to be sold to increase overall net operating income by $2,000?
Calculate the contribution margin of a product for a service company if revenues are $50,000, variable expenses are $30,000, and fixed expenses are $15,000. a.) $ 20,000 b.) $80,000 c.) $35,000 d.) $5,000
Last month when Holiday Creations, Inc., sold 45,000 units, total sales were $289,000, total variable expenses were $236,980, and fixed expenses were $35,400. Required: 1. What is the company's contribution margin (CM) ratio? 2. What is the estimated change in the company's net operating income if it can increase total sales by $1,700? (Do not round intermediate calculations.) 1. Contribution margin ratio % 2. Estimated change in net operating income

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS