6. Penury Company offers two products. At present, the following represents the usual results of a...
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6. Penury Company offers two products. At present, the following represents the usual results of a month's operations: Product K Product L Per Per Unit Unit Combined Sales revenue . $120,000 $1.20 $80,000 $0.80 $200,000 Variable expenses. Contribution margin.. Fixed expenses. Net operating income. 60,000 $ 60,000 S0.60 60.000 0.60 $20.000 $0.20 0.60 120,000 80,000 50,000 $ 30,000 Required: a. Find the break-even point in dollars. b. Find the margin of safety in dollars. c. The company is considering decreasing product K's unit sales to 80,000 and increasing product L's unit sales to 180,000, leaving unchanged the selling price per unit, variable expense per unit, and total fixed expenses. Would you advise adopting this plan? d. Refer to (c) above. Under the new plan, find the break-even point in dollars. e. Under the new plan in (c) above, find the margin of safety in dollars. 6. Penury Company offers two products. At present, the following represents the usual results of a month's operations: Product K Product L Per Per Unit Unit Combined Sales revenue . $120,000 $1.20 $80,000 $0.80 $200,000 Variable expenses. Contribution margin.. Fixed expenses. Net operating income. 60,000 $ 60,000 S0.60 60.000 0.60 $20.000 $0.20 0.60 120,000 80,000 50,000 $ 30,000 Required: a. Find the break-even point in dollars. b. Find the margin of safety in dollars. c. The company is considering decreasing product K's unit sales to 80,000 and increasing product L's unit sales to 180,000, leaving unchanged the selling price per unit, variable expense per unit, and total fixed expenses. Would you advise adopting this plan? d. Refer to (c) above. Under the new plan, find the break-even point in dollars. e. Under the new plan in (c) above, find the margin of safety in dollars.
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Related Book For
Principles of Accounting
ISBN: 978-1133626985
12th edition
Authors: Belverd E. Needles, Marian Powers and Susan V. Crosson
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