JJP info for the last two years Balance sheets Balance Sheet Year 2 Year 1 Assets...

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JJP info for the last two years Balance sheets Balance Sheet Year 2 Year 1 Assets Current Assets Cash $17,000 $12,000 Accounts receivable 60,000 40,000 Inventory 84,000 70,000 Prepaid Expenses 6,000 4,000 Long term assets Equipment 250,000 210,000 Accumulated Dep. Plant assets (60,000) (48,000) Total Assets $357,000 $288,000 Liabilities Current Liabilities Accounts Payable 35,000 40,000 Income Tax Payable 3,000 4,000 Income taxes payable 22,000 12,000 Dividends Payable 0 0 Long-term liabilities Long term notes payable 90,000 64,000 Total Liabilities $150,000 $120,000 Stockholders' Equity Common Stock $5 par 95,000 80,000 Retained Earnings 112,000 88,000 Total Stockholders Equity 207,000 168,000 Total Liab. And Stockholders Equity $357,000 $288,000 JJP Income Statement last year Income Statement Year 2 Sales Revenue Costs of Goods Sold $590,000 300,000 Gross Profit 290,000 Operating Expenses Other Operating Expense $216,000 Depreciation Expense-Plant Assets 24,000 Interest Expense 7,000 Total Operating Expenses Operating Income Other Revenue and Expenses Loss on Sale of Plant Assets Loss on retirement of bonds Total other Rev and Exp. Net Income Before Taxes Income Tax Expense Net Income 247,000 43,000 (6,000) 16,000 10,000 53,000 (15,000) $38,000 Part Two Contribution Margin James and Jackie Simpson set up a company called Heavenly Sounds Incorporated. They provide music CDs around the Virginia Beach, Virginia area for various musical artist and aspiring musical artists. The company sold 12,000 CDs and they sell for $18 each for the year ended December 31. The tax rate is 21%. Variable production costs Plastic for casing - $1,500 Wage of assembly workers - $30,000 Labeling $3,000 Selling and Administrative-$6,000 Fixed manufacturing costs Rent on Factory - $6,750 Factory maintenance - $4,520 Factory machine depreciation - $20,000 Fixed selling and administrative costs Lease of equipment - $1,050 Accounting staff salaries - $15,000 Administrative management salaries - $120,000 Required: Please complete the following: 1. Compute the contribution margin. 2. Compute the contribution margin ratio. 3. Compute the break-even in sales units. 4. Compute the break-even in sales dollars. 5. Compute the margin of safety in units. 6. Prepare a contribution income statement for the year end. 7. Compute the unit sales required for a monthly after-tax profit of $50,000. JJP info for the last two years Balance sheets Balance Sheet Year 2 Year 1 Assets Current Assets Cash $17,000 $12,000 Accounts receivable 60,000 40,000 Inventory 84,000 70,000 Prepaid Expenses 6,000 4,000 Long term assets Equipment 250,000 210,000 Accumulated Dep. Plant assets (60,000) (48,000) Total Assets $357,000 $288,000 Liabilities Current Liabilities Accounts Payable 35,000 40,000 Income Tax Payable 3,000 4,000 Income taxes payable 22,000 12,000 Dividends Payable 0 0 Long-term liabilities Long term notes payable 90,000 64,000 Total Liabilities $150,000 $120,000 Stockholders' Equity Common Stock $5 par 95,000 80,000 Retained Earnings 112,000 88,000 Total Stockholders Equity 207,000 168,000 Total Liab. And Stockholders Equity $357,000 $288,000 JJP Income Statement last year Income Statement Year 2 Sales Revenue Costs of Goods Sold $590,000 300,000 Gross Profit 290,000 Operating Expenses Other Operating Expense $216,000 Depreciation Expense-Plant Assets 24,000 Interest Expense 7,000 Total Operating Expenses Operating Income Other Revenue and Expenses Loss on Sale of Plant Assets Loss on retirement of bonds Total other Rev and Exp. Net Income Before Taxes Income Tax Expense Net Income 247,000 43,000 (6,000) 16,000 10,000 53,000 (15,000) $38,000 Part Two Contribution Margin James and Jackie Simpson set up a company called Heavenly Sounds Incorporated. They provide music CDs around the Virginia Beach, Virginia area for various musical artist and aspiring musical artists. The company sold 12,000 CDs and they sell for $18 each for the year ended December 31. The tax rate is 21%. Variable production costs Plastic for casing - $1,500 Wage of assembly workers - $30,000 Labeling $3,000 Selling and Administrative-$6,000 Fixed manufacturing costs Rent on Factory - $6,750 Factory maintenance - $4,520 Factory machine depreciation - $20,000 Fixed selling and administrative costs Lease of equipment - $1,050 Accounting staff salaries - $15,000 Administrative management salaries - $120,000 Required: Please complete the following: 1. Compute the contribution margin. 2. Compute the contribution margin ratio. 3. Compute the break-even in sales units. 4. Compute the break-even in sales dollars. 5. Compute the margin of safety in units. 6. Prepare a contribution income statement for the year end. 7. Compute the unit sales required for a monthly after-tax profit of $50,000.

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1 Contribution Margin can be computed as Sales Variable Cost Sales 12000 18 216000 Substituting the ... View the full answer