The Dell Delight owns and operates six stores in and around Minneapolis. You are given the...
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The Dell Delight owns and operates six stores in and around Minneapolis. You are given the following corporate budget data for next year. Data table $ 10,300,000 Revenues Fixed costs $ 1,800,000 Variable costs $ 7,800,000 Cases Variable costs change based on the number of subs sold. Requirement Compute the budgeted operating income for each of the following deviations from the original budget data. (Consider each case independently.) 1. An 11% increase in contribution margin, holding revenues constant 2. An 11% decrease in contribution margin, holding revenues constant 3. A 4% increase in fixed costs 4. A 4% decrease in fixed costs 5. An 8% increase in units sold 6. An 8% decrease in units sold 7. An 11% increase in fixed costs and an 11% increase in units sold 8. A 4% increase in fixed costs and a 4% decrease in variable costs 9. Which of these alternatives yields the highest budgeted operating income? Explain why this is the case. Begin by completing the table for the original information provided, then complete the table for each case, one at a time. (For amounts with a 50 balance, make sure to enter "0" in the appropriate cell.) Original 1. 2. 3. 4. 5. Revenues Variable costs Contribution margin Fixed costs Budgeted operating income The Dell Delight owns and operates six stores in and around Minneapolis. You are given the following corporate budget data for next year. Data table $ 10,300,000 Revenues Fixed costs $ 1,800,000 Variable costs $ 7,800,000 Cases Variable costs change based on the number of subs sold. Requirement Compute the budgeted operating income for each of the following deviations from the original budget data. (Consider each case independently.) 1. An 11% increase in contribution margin, holding revenues constant 2. An 11% decrease in contribution margin, holding revenues constant 3. A 4% increase in fixed costs 4. A 4% decrease in fixed costs 5. An 8% increase in units sold 6. An 8% decrease in units sold 7. An 11% increase in fixed costs and an 11% increase in units sold 8. A 4% increase in fixed costs and a 4% decrease in variable costs 9. Which of these alternatives yields the highest budgeted operating income? Explain why this is the case. Begin by completing the table for the original information provided, then complete the table for each case, one at a time. (For amounts with a 50 balance, make sure to enter "0" in the appropriate cell.) Original 1. 2. 3. 4. 5. Revenues Variable costs Contribution margin Fixed costs Budgeted operating income
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To compute the budgeted operating income for each of the given deviations from the original budget data we need to apply the changes to the relevant c... View the full answer
Related Book For
Horngrens Cost Accounting A Managerial Emphasis
ISBN: 978-0134475585
16th edition
Authors: Srikant M. Datar, Madhav V. Rajan
Posted Date:
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