Fry Corporation developed the following income statement using a contribution margin approach: Fry Corporation Projected Income...
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Fry Corporation developed the following income statement using a contribution margin approach: Fry Corporation Projected Income Statement For the Current Year Sales (8,000 units) Less variable costs: Variable manufacturing costs Variable selling costs Total variable costs Contribution margin Less fixed costs: Fixed manufacturing costs Fixed selling and administrative costs Total fixed costs Operating income Required: $68,500 34,500 $76,000 21,500 $298,000 103,000 $195,000 97,500 $97,500 A. Determine the break-even point in sales dollars. Round units Up to next whole unit. Use rounded amount in subsequent computations. 150,000 X Less fixed costs: Fixed manufacturing costs Fixed selling and administrative costs Total fixed costs Operating income Required: $76,000 21,500 150,000 X 97,500 $97,500 A. Determine the break-even point in sales dollars. Round units Up to next whole unit. Use rounded amount in subsequent computations. For B-C, round final answer to the nearest whole dollar. B. The sales manager believed the company could increase sales by 1,750 units if advertising expenditures were increased by $12,000. By how much will the operating income increase or decrease if the advertising is increased as suggested? 29,072 X decrease - X c. What is the maximum amount the company could pay for advertising if the advertising would increase sales by 1,750 units? 42,656 X Fry Corporation developed the following income statement using a contribution margin approach: Fry Corporation Projected Income Statement For the Current Year Sales (8,000 units) Less variable costs: Variable manufacturing costs Variable selling costs Total variable costs Contribution margin Less fixed costs: Fixed manufacturing costs Fixed selling and administrative costs Total fixed costs Operating income Required: $68,500 34,500 $76,000 21,500 $298,000 103,000 $195,000 97,500 $97,500 A. Determine the break-even point in sales dollars. Round units Up to next whole unit. Use rounded amount in subsequent computations. 150,000 X Less fixed costs: Fixed manufacturing costs Fixed selling and administrative costs Total fixed costs Operating income Required: $76,000 21,500 150,000 X 97,500 $97,500 A. Determine the break-even point in sales dollars. Round units Up to next whole unit. Use rounded amount in subsequent computations. For B-C, round final answer to the nearest whole dollar. B. The sales manager believed the company could increase sales by 1,750 units if advertising expenditures were increased by $12,000. By how much will the operating income increase or decrease if the advertising is increased as suggested? 29,072 X decrease - X c. What is the maximum amount the company could pay for advertising if the advertising would increase sales by 1,750 units? 42,656 X
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Answer rating: 100% (QA)
To determine the breakeven point in sales dollars we need to find the sales volume at which the contribution margin equals the fixed costs This can be calculated using the following formula Breakeven ... View the full answer
Related Book For
Principles of Accounting
ISBN: 978-1133626985
12th edition
Authors: Belverd E. Needles, Marian Powers and Susan V. Crosson
Posted Date:
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