Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the...
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Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month's budget appear below: Selling price per unit Variable expense per unit Fixed expense per month Unit sales per month Required: $ 29 $ 18 $ 9,790 1,040 1. What is the company's margin of safety? (Do not round intermediate calculations.) 2. What is the company's margin of safety as a percentage of its sales? (Round your percentage answer to 2 decimal places (i.e. .1234 should be entered as 12.34).) 1. Margin of safety (in dollars) 2. Margin of safety percentage % Exercise 5-13 (Algo) Changes in Selling Price, Sales Volume, Variable Cost per Unit, and Total Fixed Costs [LO5-1, LO5-4] Miller Company's contribution format income statement for the most recent month is shown below: Total Sales (45,000 units) Variable expenses Contribution margin $ 225,000 90,000 135,000 Per Unit $ 5.00 2.00 $ 3.00 Fixed expenses 40,000 Net operating income $ 95,000 Required: (Consider each case independently): 1. What is the revised net operating income if unit sales increase by 17%? 2. What is the revised net operating income if the selling price decreases by $1.50 per unit and the number of units sold increases by 20%? 3. What is the revised net operating income if the selling price increases by $1.50 per unit, fixed expenses increase by $5,000, and the number of units sold decreases by 6%? 4. What is the revised net operating income if the selling price per unit increases by 10%, variable expenses increase by 20 cents per unit, and the number of units sold decreases by 9%? 1. Net operating income 2. Net operating income 3. Net operating income 4. Net operating income Exercise 5-9 (Algo) Compute and Use the Degree of Operating Leverage [LO5-8] Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Amount $ 86,000 Percent of Sales 34,400 51,600 100% 40 60% 38,700 $ 12,900 Sales Variable expenses Contribution margin Fixed expenses Net operating income 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 8% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 8% increase in unit sales. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the company's degree of operating leverage? (Round your answer to 2 decimal places.) Degree of operating leverage Required 1 Required 2 Required 3 Using the degree of operating leverage, estimate the impact on net operating income of a 8% increase in unit sales. (Round your intermediate calculations to 2 decimal places. Round your percentage answer to 2 decimal places (i.e .1234 should be entered as 12.34).) Net operating income by < Required 1 % Required 3 > Required 1 Required 2 Required 3 Construct a new contribution format income statement for the company assuming a 8% increase in unit sales. Engberg Company Contribution Income Statement Amount Percent of Sales % % % < Required 2 Required 3 > Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month's budget appear below: Selling price per unit Variable expense per unit Fixed expense per month Unit sales per month Required: $ 29 $ 18 $ 9,790 1,040 1. What is the company's margin of safety? (Do not round intermediate calculations.) 2. What is the company's margin of safety as a percentage of its sales? (Round your percentage answer to 2 decimal places (i.e. .1234 should be entered as 12.34).) 1. Margin of safety (in dollars) 2. Margin of safety percentage % Exercise 5-13 (Algo) Changes in Selling Price, Sales Volume, Variable Cost per Unit, and Total Fixed Costs [LO5-1, LO5-4] Miller Company's contribution format income statement for the most recent month is shown below: Total Sales (45,000 units) Variable expenses Contribution margin $ 225,000 90,000 135,000 Per Unit $ 5.00 2.00 $ 3.00 Fixed expenses 40,000 Net operating income $ 95,000 Required: (Consider each case independently): 1. What is the revised net operating income if unit sales increase by 17%? 2. What is the revised net operating income if the selling price decreases by $1.50 per unit and the number of units sold increases by 20%? 3. What is the revised net operating income if the selling price increases by $1.50 per unit, fixed expenses increase by $5,000, and the number of units sold decreases by 6%? 4. What is the revised net operating income if the selling price per unit increases by 10%, variable expenses increase by 20 cents per unit, and the number of units sold decreases by 9%? 1. Net operating income 2. Net operating income 3. Net operating income 4. Net operating income Exercise 5-9 (Algo) Compute and Use the Degree of Operating Leverage [LO5-8] Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Amount $ 86,000 Percent of Sales 34,400 51,600 100% 40 60% 38,700 $ 12,900 Sales Variable expenses Contribution margin Fixed expenses Net operating income 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 8% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 8% increase in unit sales. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the company's degree of operating leverage? (Round your answer to 2 decimal places.) Degree of operating leverage Required 1 Required 2 Required 3 Using the degree of operating leverage, estimate the impact on net operating income of a 8% increase in unit sales. (Round your intermediate calculations to 2 decimal places. Round your percentage answer to 2 decimal places (i.e .1234 should be entered as 12.34).) Net operating income by < Required 1 % Required 3 > Required 1 Required 2 Required 3 Construct a new contribution format income statement for the company assuming a 8% increase in unit sales. Engberg Company Contribution Income Statement Amount Percent of Sales % % % < Required 2 Required 3 >
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Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Posted Date:
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