Crane Candy Company is a wholesale distributor of candy. The company services grocers, convenience stores, and...

 

  

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Crane Candy Company is a wholesale distributor of candy. The company services grocers, convenience stores, and drugstores in a large metropolitan area. Crane Candy Company has achieved small but steady growth in sales over the past few years, but costs have also been increasing. The company is formulating its plans for the coming fiscal year. The following data were used to project the current year's after-tax operating income of $310,272: Average selling price Average variable costs Cost of candy Selling expenses Total Annual fixed costs Selling Administrative Total $8.00 per box $4.00 0.80 $4.80 $332,800 696,800 $1,029,600 per box per box per box The expected annual sales volume (811,200 boxes) is $6,489,600 and the tax rate is 40%. Candy manufacturers have announced that they will increase the prices of their products by an average of 15% in the coming year because of increases in raw material (sugar, cocoa, peanuts, and so on) and labour costs. Crane Candy Company expects that all other costs will remain at the same rates or levels as during the current year. TO Your answer is correct. Calculate Crane Candy Company's break-even point in boxes of candy for the current year. Break-even point (b) eTextbook and Media Your answer is correct. Selling price per box $ 321750 Calculate the selling price per box that Crane Candy Company must charge to cover the 15% increase in the variable cost of candy and still maintain the current contribution margin ratio. (Round answer to 2 decimal places, e.g. 1.25.) eTextbook and Media units 9 Attempts: 1 of 2 used Attempts: 1 of 2 used (c) Your answer is incorrect. Calculate the volume of sales in dollars that Crane Candy Company must achieve in the coming year to keep the same operating income after taxes that was projected for the current year if the selling price of candy remains at $8.00 per box and the cost of candy increases by 15%. (Round contribution margin ratio to 2 decimal places, e.g. 15.25% and final answer to O decimal places, e.g. 125.) Volume of sales to be maintained e Textbook and Media $ 118,300,000 Crane Candy Company is a wholesale distributor of candy. The company services grocers, convenience stores, and drugstores in a large metropolitan area. Crane Candy Company has achieved small but steady growth in sales over the past few years, but costs have also been increasing. The company is formulating its plans for the coming fiscal year. The following data were used to project the current year's after-tax operating income of $310,272: Average selling price Average variable costs Cost of candy Selling expenses Total Annual fixed costs Selling Administrative Total $8.00 per box $4.00 0.80 $4.80 $332,800 696,800 $1,029,600 per box per box per box The expected annual sales volume (811,200 boxes) is $6,489,600 and the tax rate is 40%. Candy manufacturers have announced that they will increase the prices of their products by an average of 15% in the coming year because of increases in raw material (sugar, cocoa, peanuts, and so on) and labour costs. Crane Candy Company expects that all other costs will remain at the same rates or levels as during the current year. TO Your answer is correct. Calculate Crane Candy Company's break-even point in boxes of candy for the current year. Break-even point (b) eTextbook and Media Your answer is correct. Selling price per box $ 321750 Calculate the selling price per box that Crane Candy Company must charge to cover the 15% increase in the variable cost of candy and still maintain the current contribution margin ratio. (Round answer to 2 decimal places, e.g. 1.25.) eTextbook and Media units 9 Attempts: 1 of 2 used Attempts: 1 of 2 used (c) Your answer is incorrect. Calculate the volume of sales in dollars that Crane Candy Company must achieve in the coming year to keep the same operating income after taxes that was projected for the current year if the selling price of candy remains at $8.00 per box and the cost of candy increases by 15%. (Round contribution margin ratio to 2 decimal places, e.g. 15.25% and final answer to O decimal places, e.g. 125.) Volume of sales to be maintained e Textbook and Media $ 118,300,000

Answer rating: 100% (QA)

1 Breakeven point in boxes or in units can be calculated as Fixed Cost Contribution margin per unit ... View the full answer