Booth Company had sales in 2020 of $1,810,000 ori 72,400 units. Variable costs totaled $1,086,000 and...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Booth Company had sales in 2020 of $1,810,000 ori 72,400 units. Variable costs totaled $1,086,000 and fixed costs totaled $493,000. Anew raw material is available that will decrease the variable costs per unit by 20% (or $3.00). However, to process the new raw material, fixed operating costs will Increase by $130,000. Management feels that two-thirds of the decline in the variable costs per unit should be passed on to customers in the form of a sales price reduction. The marketing department expects that this sales price reduction will result in a 4% increase in the number of units sold. Before Booth Company had the chance to implement usage of the new raw material, new industry specifications were announced and result in the following changes for the Booth Company. Variable costs will increase by 15% per unit and fixed costs will increase by $54,000. Management feels that a $3 per unit price increase is needed to accommodate the cost increases, However, this will result in a 10% decrease in units sold. Prepare a CVP income statement assuming these changes have been made. Booth Company CVP Income Statement For the Year Ended December 31, 2020 %24 Sales Variable Costs Contribution Margin Less : Fixed Costs %24 Net Income/(Loss) Booth Company had sales in 2020 of $1,810,000 ori 72,400 units. Variable costs totaled $1,086,000 and fixed costs totaled $493,000. Anew raw material is available that will decrease the variable costs per unit by 20% (or $3.00). However, to process the new raw material, fixed operating costs will Increase by $130,000. Management feels that two-thirds of the decline in the variable costs per unit should be passed on to customers in the form of a sales price reduction. The marketing department expects that this sales price reduction will result in a 4% increase in the number of units sold. Before Booth Company had the chance to implement usage of the new raw material, new industry specifications were announced and result in the following changes for the Booth Company. Variable costs will increase by 15% per unit and fixed costs will increase by $54,000. Management feels that a $3 per unit price increase is needed to accommodate the cost increases, However, this will result in a 10% decrease in units sold. Prepare a CVP income statement assuming these changes have been made. Booth Company CVP Income Statement For the Year Ended December 31, 2020 %24 Sales Variable Costs Contribution Margin Less : Fixed Costs %24 Net Income/(Loss)
Expert Answer:
Related Book For
Posted Date:
Students also viewed these business communication questions
-
If you had the chance to work from home and telecommute, would you take it? If the opportunitymeant that you had to allow your company to monitor every call on your phone and every keystroke on your...
-
The Booth Company's sales are forecasted to increase from $1,000 in 2007 to $2,000 in 2008. Here is the balance sheet for December 31, 2007. Booth's fixed assets were used to only 50% of capacity...
-
The following diagram shows the flow process, raw material costs, and machine processing time for three products: A, B, and C. There are three machines ( W, X, and Y) used in the production of these...
-
Perform computational experiments to verify that the average path length in a ring graph on \(V\) vertices is \(\sim 1 / 4 V\). Then, repeat these experiments, but add one random edge to the ring...
-
Develop a multiple regression model with categorical variables that incorporate seasonality for forecasting the temperature in Washington, D. C., using the data for years 1999 and 2000 in the Excel...
-
The cash flows for a certain project are as given in Table P6.10. Find the equivalent annual worth for this project at i = 10%, and determine the acceptability of the project. Net Cash Flow n...
-
Discuss some of the key reasons for studying anthropology.
-
Leland Company has accounts receivable of $98,100 at March 31. An analysis of the accounts shows the following information. Month of Sale Balance, March 31 March ........... $65,000 February...
-
Radar Company sells bikes for $500 each. The company currently sells 4,350 bikes per year and could make as many as 4,740 bikes per year. The bikes cost $270 each to make: $180 in variable costs per...
-
Table 5.5 gives data on average public teacher pay (annual salary in dollars) and spending on public schools per pupil (dollars) in 1985 for 50 states and the District of Columbia. To find out if...
-
If football matches were shortened form 90 minutes to 45 minutes, would you expect more uncertainty of outcome or less? Refer to any sports economic theories.
-
Nova Incorporated declared and paid $4,800 of cash dividends during the current year ended December 31. Its financial statements also reported the following summarized data: Current Previous Income...
-
4. 5. 6. Evaluate 2m 1.5. de o a+b sin 8 2. ( sin0 de a +'b cos 0 3. 5*(1+2 cos y cos nede 3+2 cos 0 .f cos 20 de 5+4 cos 0 5. 5 cos 20 de 1-2 a cos 0+qa <1 [cos (sin 8-n0) de de (a + b cos 6) 8.5....
-
Sketch the plane parallel to the yz-plane through (6,9,7) and find its equation. Sketch the plane parallel to the yz-plane through (6,9,7). Choose the correct graph below. OA OR Oc (6,9,7) (6,9,7)...
-
A1) Question(s) Question (1): Construct a quantitative model and apply to address a particular business problem! You may select any of the models addressed in the course syllabus depending on the...
-
epton Inc. is a bioengineering firm founded five years ago by a team of biologists. A ven- ture capitalist has funded Lepton's research during most of this time in exchange for a control- ling...
-
Define and develop elements of a contract and determine whether a duly formed contract is enforceable under the common law or Uniform Commercial Code.?
-
An annual report of The Campbell Soup Company reported on its income statement $2.4 million as equity in earnings of affiliates. Journalize the entry that Campbell would have made to record this...
-
Does the role of an ethics officer bring real value to an organization, or is it just window dressing to make the company look good?
-
What would you do if someone sent you an e-mail at work that you found offensive? Would you just delete it or say something to that person?
-
Give some examples of the kind of ethical misconduct that could have led to the termination of the entire senior leadership of Global Mutual. Global Mutual was, by all accounts, a model insurance...
-
How does a firms corporate strategy affect its operations management?
-
How do production management and service operations management differ?
-
What is supply chain management? What is vertical integration?
Study smarter with the SolutionInn App