Show and label all supporting calculations. Full credit will not be awarded without calculations. Enter your...
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Show and label all supporting calculations. Full credit will not be awarded without calculations. Enter your responses and supporting calculations on the lined paper provided. Skip a line between each item. Magnolia Company is considering the production and sale of a new product with the following sales and cost data: unit sales price, $200; unit variable costs, $160; total fixed costs, $664,400; and projected sales, $5,500,000. Round your answers to the appropriate whole unit or nearest dollar. (a) Calculate contribution margin per unit. (b) Determine the break-even point in units. (c) If the company achieves $5,500,000 in sales revenue, how many units would be sold? (d) If the company achieves $5,500,000 in sales revenue, what is the margin of safety? (e) Determine the number of units that would need to be sold to generate a net income of $500,000. (f) Calculate dollar amount of sales revenue that would be needed to generate $500,000 profit. (g) Without making any calculations, if fixed costs decreased, would the breakeven point calculated in (b) increase or decrease? Briefly explain your response. (h) What would be the new breakeven point in units if variable costs decreased to $156 per unit with no change in selling price? Show and label all supporting calculations. Full credit will not be awarded without calculations. Enter your responses and supporting calculations on the lined paper provided. Skip a line between each item. Magnolia Company is considering the production and sale of a new product with the following sales and cost data: unit sales price, $200; unit variable costs, $160; total fixed costs, $664,400; and projected sales, $5,500,000. Round your answers to the appropriate whole unit or nearest dollar. (a) Calculate contribution margin per unit. (b) Determine the break-even point in units. (c) If the company achieves $5,500,000 in sales revenue, how many units would be sold? (d) If the company achieves $5,500,000 in sales revenue, what is the margin of safety? (e) Determine the number of units that would need to be sold to generate a net income of $500,000. (f) Calculate dollar amount of sales revenue that would be needed to generate $500,000 profit. (g) Without making any calculations, if fixed costs decreased, would the breakeven point calculated in (b) increase or decrease? Briefly explain your response. (h) What would be the new breakeven point in units if variable costs decreased to $156 per unit with no change in selling price?
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a Contribution margin per unit Contribution margin per unit Unit sales price Unit variable costs Con... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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