of safety, and operating leverage Organic Health Care Products Inc. expects to maintain the same inventories...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
of safety, and operating leverage Organic Health Care Products Inc. expects to maintain the same inventories at the end of 2018 as at the beginning of the year. The total of all production costs for the year is therefore as sumed 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 20Y8. A summary report of these estimates is as follows: Production costs: Direct materials Direct labor Factory overhead Selling expenses: Advertising Sales salaries and commissions Travel Miscellaneous selling expense Administrative expenses: Estimated Fixed Cost $ 200,000 1,450,000 93,000 340,000 2,000 300,000 10,000 5,000 $2,400,000 Estimated Variable Cost (per unit sold) Instructions 1. Prepare an estimated income statement for 20Y8. 2. What is the expected contribution margin ratio? 3. Determine the break-even sales in units. $ 8.00 3.00 1.50 1.85 Office and officers'salaries Supplies Miscellaneous administrative expense Total It is expected that 400,000 units will be sold at a price of $25 a unit. Maximum sales within the relevant range are 500,000 units. 0.10 0.50 0.05 $15.00 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? 6. Determine the operating leverage. of safety, and operating leverage Organic Health Care Products Inc. expects to maintain the same inventories at the end of 2018 as at the beginning of the year. The total of all production costs for the year is therefore as sumed 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 20Y8. A summary report of these estimates is as follows: Production costs: Direct materials Direct labor Factory overhead Selling expenses: Advertising Sales salaries and commissions Travel Miscellaneous selling expense Administrative expenses: Estimated Fixed Cost $ 200,000 1,450,000 93,000 340,000 2,000 300,000 10,000 5,000 $2,400,000 Estimated Variable Cost (per unit sold) Instructions 1. Prepare an estimated income statement for 20Y8. 2. What is the expected contribution margin ratio? 3. Determine the break-even sales in units. $ 8.00 3.00 1.50 1.85 Office and officers'salaries Supplies Miscellaneous administrative expense Total It is expected that 400,000 units will be sold at a price of $25 a unit. Maximum sales within the relevant range are 500,000 units. 0.10 0.50 0.05 $15.00 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? 6. Determine the operating leverage.
Expert Answer:
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Soldner Health Care Products Inc. expects to maintain the same inventories at the end of 2010 as at the beginning of the year. The total of all production costs for the year is therefore assumed to...
-
Soldner Health Care Products Inc. expects to maintain the same inventories at the end of 2010 as at the beginning of the year. The total of all production costs for the year is therefore assumed to...
-
Organic Health Care Products Inc. expects to maintain the same inventories at the end of 2012 as at the beginning of the year. The total of all production costs for the year is therefore assumed to...
-
Q1. A 10-kg uniform rod ABC is connected to two collars of negligible mass which slide on horizontal, frictionless rods located in the same vertical plane. If a force P of magnitude 50 N is applied...
-
Mason & Dilworth (M& D), CPAs, were auditors for Hotshot Company, a closely held corporation owned by 30 residents of the area. Hotshot had previously engaged M& D to perform some compilation and tax...
-
If unexpected increases in the growth rate of the money supply can increase real GDP, why doesnt the Fed follow a policy of unexpectedly increasing the money supply to increase the growth of real GDP?
-
For Exercise 17.1, the return on investment desired by the chemical company is 20%. Determine the venture profit.
-
Cramtrack, the regional commuter train system, is trying to train users of its newly installed computer system. For the users to get the proper training, the systems analysts involved with the...
-
Chatman has pled guilty to possession of controlled substances and is pending sentencing. His attorney has told him that the judge usually orders everyone drug tested at sentencing and the result...
-
On a particular day, a random sample of 12 tins of peas was taken from the output of a canning factory, and their contents were weighed. The mean and standard deviation of weights (of the contents of...
-
If money can earn 7.8% compounded monthly, how much more money is required to fund an ordinary annuity paying $360 per month for 25 years than to fund the same monthly payment for 15 years? (Do not...
-
What interaction does a bathroom (spring) scale actually measure?
-
You throw a baseball straight up, and because of air resistance some of the ball's energy is converted to thermal energy during the whole trip. Which takes longer: the trip up or the trip down?
-
Check that the distribution of \(A_{\Theta}^{(u)}\) is that of \(B /(2 \Gamma)\) where \(B\) has a \(\operatorname{Beta}(1, \alpha)\) law and \(\Gamma\) a \(\operatorname{Gamma}(\beta, 1)\) law with...
-
In a game of tug of war, the blue team is beating the red team, and the red team is accelerating toward the mud pit between the two teams. Which has the greater magnitude, if either: the force the...
-
You are discussing physics homework with a friend while the two of you are riding your bikes. Distracted, you collide with a parked car. The car doesn't move. Your friend says, "Of course not! The...
-
Suppose that the New York City Police Department cannot effectively deal with crimes of street robbery and residential burglary in the city. The federal government wants to send in federal agents to...
-
Assessing simultaneous changes in CVP relationships Braun Corporation sells hammocks; variable costs are $75 each, and the hammocks are sold for $125 each. Braun incurs $240,000 of fixed operating...
-
Roberts and Chou, CPAs, offer three types of services to clients: auditing, tax, and small business accounting. Based on experience and projected growth, the following billable hours have been...
-
Mirna Gaymer, vice president of operations for Rocky Mountain County Bank, has instructed the banks computer programmer to use a 365-day year to compute interest on depository accounts (payables)....
-
In the following summary of data for a payroll period, some amounts have been intentionally omitted: Earnings: 1. At regular rate. ? 2. At overtime rate. $ 60,000 3. Total earnings ? Deductions: 4....
-
What are the basic forms of international business activity?
-
Discuss the meaning of international business.
-
What is international business? How does it differ from domestic business?
Study smarter with the SolutionInn App