Company Y gave the following information to its management accounting department to make a cost profit...
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Company Y gave the following information to its management accounting department to make a cost profit volume analysis about the company Sales In units Sales Variable manufacturing overhead in units Unit variable cost for overhead Fixed Cost [factory] per unit Units produced Production Capacity Selling fixed cost Prepaid insurance cost for factory Variable cost [Selling] Accrued cost REQUIRED 1. Calculate CM per unit; CMR 2. Determine the breakeven point in units and $ 3. Calculate margin of safety in $ & %. 2,000 $35 2,000 $17 $11 2700 3500 units $8,000 $1500 $ 9000 $1500 4. The sales manager believes that the company could increase sales by 200 units if advertisement increased by $2500. Should the company increase advertising expenses? 5. Determine sales revenue in units and $ necessary to generate after-tax profit of $50,000 6. Determine the sales revenue in units and $ necessary if the company wants to base its target profit on before tax profit. The after tax profit is $18000 and tax rate is 20% 7. Calculate degree of leverage [DOL] and if sales increases by 18%, what will be the total net income of this company after the sales increase. [use original data in the beginning] Company Y gave the following information to its management accounting department to make a cost profit volume analysis about the company Sales In units Sales Variable manufacturing overhead in units Unit variable cost for overhead Fixed Cost [factory] per unit Units produced Production Capacity Selling fixed cost Prepaid insurance cost for factory Variable cost [Selling] Accrued cost REQUIRED 1. Calculate CM per unit; CMR 2. Determine the breakeven point in units and $ 3. Calculate margin of safety in $ & %. 2,000 $35 2,000 $17 $11 2700 3500 units $8,000 $1500 $ 9000 $1500 4. The sales manager believes that the company could increase sales by 200 units if advertisement increased by $2500. Should the company increase advertising expenses? 5. Determine sales revenue in units and $ necessary to generate after-tax profit of $50,000 6. Determine the sales revenue in units and $ necessary if the company wants to base its target profit on before tax profit. The after tax profit is $18000 and tax rate is 20% 7. Calculate degree of leverage [DOL] and if sales increases by 18%, what will be the total net income of this company after the sales increase. [use original data in the beginning]
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Answer rating: 100% (QA)
1 The computation is as follows Contribution margin per unit Sales Variable manufacturing cost Varia... View the full answer
Related Book For
Management Accounting
ISBN: 978-0132570848
6th Canadian edition
Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu
Posted Date:
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