Revenue and cost details for a company’s single product are as follows: BWP per unit BWP per unit Sales price: 27 Variable cost: 15 Fixed cost: 8 Profit (23)/4 Fixed costs are absorbed based on the company’s normal activity, which is also the company’s budgeted sales value for each period. Last period there were no changes in inventory and the company achieved a margin of safety of 20% of the actual sales volume. Fixed costs were over-absorbed by P2,400. a. Calculate the breakeven point in units for each period.

Revenue and cost details for a company’s single product are as follows: BWP per unit BWP per unit Sales price: 27 Variable cost: 15 Fixed cost: 8 Profit (23)/4 Fixed costs are absorbed based on the company’s normal activity, which is also the company’s budgeted sales value for each period. Last period there were no changes in inventory and the company achieved a margin of safety of 20% of the actual sales volume. Fixed costs were over-absorbed by P2,400. a. Calculate the breakeven point in units for each period.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 42E: Sales Revenue Approach, Variable Cost Ratio, Contribution Margin Ratio Arberg Companys controller...

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Contribution margin, break-even sales, cost-volume-profit chart, margin of safety, and operating leverage Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows: It is expected that 12,000 units will be sold at a price of 240 a unit. Maximum sales within the relevant range are 18,000 units. Instructions 1. Prepare an estimated income statement for 20Y7. 2. What is the expected contribution margin ratio? 3. Determine the break-even sales in units and dollars. 4. Construct a cost-volume-profit chart indicating the break-even sales. 5. What is the expected margin of safety in dollars and as a percentage of sales? (Round to one decimal place.) 6. Determine the operating leverage.
West Island distributes a single product. The companys sales and expenses for the month of June are shown. Using the information presented, answer these questions: A. What is the break-even point in units sold and dollar sales? B. What is the total contribution margin at the break-even point? C. If West Island wants to earn a profit of $21,000, how many units would they have to sell? D. Prepare a contribution margin income statement that reflects sales necessary to achieve the target profit.
Sales Revenue Approach, Variable Cost Ratio, Contribution Margin Ratio Arberg Companys controller prepared the following budgeted income statement for the coming year: Required: 1. What is Arbergs variable cost ratio? What is its contribution margin ratio? 2. Suppose Arbergs actual revenues are 30,000 more than budgeted. By how much will operating income increase? Give the answer without preparing a new income statement 3. How much sales revenue must Arberg earn to break even? Prepare a contribution margin income statement to verify the accuracy of your answer. 4. What is Arbergs expected margin of safety? 5. What is Arbergs margin of safety if sales revenue is 380,000?
Revenue and cost details for a company’s single product are as follows: BWP per unit BWP per unitSales price 27Variable cost 15Fixed cost 8 (23) Profit 4 Fixed costs are absorbed based on the company’s normal activity, which is also thecompany’s budgeted sales value for each period. Last period there were no changes ininventory and the company achieved a margin of safety of 20% of the actual sales volume.Fixed costs were over-absorbed by P2,400.Required:a. Calculate the breakeven point in units for each period.
Revenue and cost details for a company’s single product are as follows:BWP per unit BWP per unitSales priceVariable costFixed costProfit15827(23)4Fixed costs are absorbed based on the company’s normal activity, which is also the company’s budgeted sales value for each period. Last period there were no changes in inventory and the company achieved a margin of safety of 20% of the actual sales volume. Fixed costs were over-absorbed by P2,400.Required: a. Calculate the breakeven point in units for each period. b. Calculate the number of units to be produced and sold to achieve a profit of P6,600 for the period
Revenue and cost details for a company’s single product are as follows:BWP per unit BWP per unitSales priceVariable costFixed costProfit15827(23)4Fixed costs are absorbed based on the company’s normal activity, which is also the company’s budgeted sales value for each period. Last period there were no changes in inventory and the company achieved a margin of safety of 20% of the actual sales volume. Fixed costs were over-absorbed by P2,400.Required: a. Calculate the breakeven point in units for each period.
Revenue and cost details for a company’s single product are as follows: BWP per unit BWP per unit Sales price 27Variable cost 15Fixed cost 8Profit 23 4 Fixed costs are absorbed based on the company’s normal activity, which is also thecompany’s budgeted sales value for each period. Last period there were no changes ininventory and the company achieved a margin of safety of 20% of the actual sales volume.Fixed costs were over-absorbed by P2,400. Required:a. Calculate the breakeven point in units for each period.
Data concerning Celenza Corporation's single product appear below: selling price per unit- $230 Variable expense per unit- 59.80 fixed expense per month- 697,820 Assume the company's monthly target profit is $18,000. The dollar sales to attain that target profit are closest to: Select one: a. $967,324 b. $1,478,766 c. $715,820 d. $2,753,154
Revenue and cost details for a company’s single product are as follows: BWP per unit BWP per unit Sales price 27 Variable cost 15 Fixed cost 8 Profit (23) 4 Fixed costs are absorbed based on the company’s normal activity, which is also the company’s budgeted sales value for each period. Last period there were no changes in inventory and the company achieved a margin of safety of 20% of the actual sales volume. Fixed costs were over-absorbed by P2,400. Calculate the breakeven point in units for each period.
Revenue and cost details for a company’s single product are as follows: BWP per unit              BWP per unit Sales price                                                                               27 Variable cost                                       15 Fixed cost                                           8 Profit                                                                                       (23)                                                                                                 4 Fixed costs are absorbed based on the company’s normal activity, which is also the company’s budgeted sales value for each period. Last period there were no changes in inventory and the company achieved a margin of safety of 20% of the actual sales volume. Fixed costs were over-absorbed by P2,400. Calculate the number of units to be produced and sold to achieve a profit of P6600 for the period
The HASF Ink Ltd income statement for the preceding year is presented below except as noted the cost / revenue relationship for the coming year is expected to follow the same pattern as in the preceding year income statement for the year ending March 31 is as follows: Sales (200,000 units @ 2.5 Each)                              Rs. 5, 00,000 Variable cost                                                                     3, 00,000 Contribution margin                                                         2, 00,000 Less Fixed cost                                                                  100,000 Profit before tax                                                                 100,000    Less tax                                                                                35,000    Profit after tax                                                                      65,000 Required: 1- The company management feels that it should earn at least Rs.10000 pre taxes per annum on…
The HASF Ink Ltd income statement for the preceding year is presented below except as noted the cost / revenue relationship for the coming year is expected to follow the same pattern as in the preceding year income statement for the year ending March 31 is as follow s Sales (200,000 units @ 2.5 Each) Rs. 5, 00,000 Variable cost        3, 00,000 Contribution margin         2, 00,000 Less Fixed cost         100,000 Profit before tax         100,000 Less tax           35,000 Profit after tax           65,000 Required The company management feels that it should earn at least Rs.10, 000 pre taxes per annum on the new investment what sales volume is required to enable the company to maintain existing profit.