ABX Inc, reports the following operating results for the month of August: Sales $400,000 (units 10,000,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
ABX Inc, reports the following operating results for the month of August: Sales $400,000 (units 10,000, unit price $160) Total Variable costs $560,000 (variable cost per unit $112) Total Contribution margin $240,000 Total Fixed costs $190,000 Management is considering increasing the selling price by 10% with no change in costs. Required: a. Compute the breakeven point in dollars if management increase the selling price (Show all of your work) b. Using your answer in part a, Compute the margin of safety ratio (Show all of your work) ABX Inc, reports the following operating results for the month of August: Sales $400,000 (units 10,000, unit price $160) Total Variable costs $560,000 (variable cost per unit $112) Total Contribution margin $240,000 Total Fixed costs $190,000 Management is considering increasing the selling price by 10% with no change in costs. Required: a. Compute the breakeven point in dollars if management increase the selling price (Show all of your work) b. Using your answer in part a, Compute the margin of safety ratio (Show all of your work)
Expert Answer:
Answer rating: 100% (QA)
a Computation of breakeven point in dollars if selling price is increased by 10 Current sell... View the full answer
Related Book For
Managerial Accounting Tools for Business Decision Making
ISBN: 978-1118856994
4th Canadian edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly
Posted Date:
Students also viewed these accounting questions
-
Please watch this YouTube video on managing employee benefits https://www.youtube.com/watch?v=Ja9swkXpgGc Links to an external site. and respond to the following questions: Which elements of benefits...
-
Cottonwood Company reports the following operating results for the month of April. Management is considering the following course of action to increase net income: Reduce the selling price by 10%,...
-
Queensland Company reports the following operating results for the month of April. Management is considering the following course of action to increase net income: Reduce the selling price by 4%,...
-
In an attempt to identify ecologically friendly methods for controlling mosquito populations, researchers conducted eld experiments in India where aquatic nymphs of the dragony Brachytron pretense...
-
Power often accrues to individuals who are very effective in their jobs or to firms that enjoy sustained high performance. If this is so, how is power different from basic competence, efficiency or...
-
In 2013, McDonald's reported profits of almost $6 billion on sales of $28 billion. For that same period, Burger King posted a profit of almost $234 million on sales of $1.1 billion. So McDonald's is...
-
On its books, Navarro Companys Cash account shows an ending balance of \($770\). The bank statement for the current period shows a \($20\) service charge and an NSF check for \($100.\) A \($250\)...
-
Excerpted financial information from the records of The Gap, Inc., a major clothing retailer, follows (dollar in million s)" a. Compute the current ratio for each year.b. Compute the gross margin for...
-
Describe the role that marketing research plays at Dunkin' Donuts. What sort of information does Dunkin' Donuts consider when it's determining where to locate a new store? Discuss the importance of...
-
Part 1: Hypothetical Tax Code 1 Consider a simplified version of the real tax code. Assume that the tax rate on all taxable income is 15% and the standard deduction ($6,350) and personal exemption...
-
The Boxer Company's cash flows are either $100 or $200 per year forever. The cash flow is $100 if a hurricane hits Florida next year and $200 otherwise. Both scenarios are equally likely. All...
-
Karen earns a salary of $30,000 per year. For the pay period of April 26 to May 9th, how much of Karen's salary expense would be accrued on the April 30 financial statements of the hotel she works...
-
Sunland Inc. issued $3 million of 10-year, 9% convertible bonds on June 1, 2023, at 98 plus accrued interest. The bonds were dated April 1, 2023, with interest payable April 1 and October 1. Bond...
-
(a) Graph the line through the points (-6, -4) and (0, 4). 10+ 8 6 4 2 10 -8 -6-4-2 2 -2 -4 -6- Clear Al Draw: -8 4 60 8 10 10+ AVO (b) Write an equation of the line in the form y = mx+b. y=
-
1) If a company has fixed costs of $6,000 per month and their product that sells for $200 has a contribution margin ratio of 30%, how many units must they sell in order to break even? 2) A company...
-
Big Bird uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of July. Sales revenue $620,000 Inventory, July 1 99,200...
-
Consider a linear system below: 3x + y + 2z + 5t = 1 x + 2y z + 2t = 0 4x + 3y + z 7t = c Find: (a) find c such that the system is consistent. (b) solve the system with c found in the previous task...
-
Wholesalers Ltd. deals in the sale of foodstuffs to retailers. Owing to economic depression, the firm intends to relax its credit policy to boost productivity and sales. The firms current credit...
-
Prestige Auto Care is considering the purchase of a new tow truck. The garage currently has no tow truck, and the $60,000 price tag for a new truck would be a major expenditure for it. Jenna Lind,...
-
Fresh Air Products manufactures and sells a variety of camping products. Recently the company opened a new plant to manufacture a deluxe portable cooking unit. Cost and sales data for the first month...
-
In its first year of operation, Montreal Printing Shop estimated manufacturing overhead costs and activity in order to determine a predetermined overhead rate. At year end, overhead was over-applied...
-
True or False. In the matrix iteration method, any computational error will not yield incorrect results.
-
A uniform simply supported beam carries two masses \(m_{1}\) and \(m_{2}\) with \(m_{2}=3 m_{1}\) as shown in Fig. 7.12. Find the fundamental natural frequency of the beam using Dunkerley's method....
-
Using Rayleigh's method, find the fundamental natural frequency of the torsional system shown in Fig. 6.11. Assume that \(J_{1}=J_{0}, J_{2}=2 J_{0}, J_{3}=3 J_{0}\), and \(k_{t 1}=k_{t 2}=k_{t...
Study smarter with the SolutionInn App