Question: Hi! I really need help on this problem for managerial accounting. Any help would be greatly appreciated PR 19-2B Break-even sales under present and proposed

Hi! I really need help on this problem for managerial accounting. Any help would be greatly appreciated

Hi! I really need help on this problem for managerial accounting. Any

PR 19-2B Break-even sales under present and proposed conditions OBJ. 2,3 Howard Industries Inc., operating at full capacity, sold 64,000 units at a price of $45 per unit during the current year. Its income statement is as follows: v3. 29,375 units $2,880,000 1400,000 $1,480,000 Cost of goods sold Selling expenses 387,500 Total expenses Income from operations 87,500 692,500 The division of costs between variable and fixed is as follows Fixed 25% 40% 20% Cost of goods sold Selling expenses 60% 80% Chapter 19 Cost Behavior and Cost-Volume-Profit Analysis 929 Management is considering a plant expansion program for the following year that will permit an increase of $900,000 in yearly sales. The expansion will increase fixed costs by $212,500 but will not affect the relationship between sales and variable costs Instructions 1. Determine the total fixed costs and the total variable costs for the current year 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the cur rent year 3. Compute the break-even sales (units) for the current year 4. Compute the break-even sales (units) under the proposed program for the following year 5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $692,500 of income from operations that was eamed in the current year. 6. Determine the maximum income from operations possible with the expanded plant 7. If the proposal is accepted and sales remain at the current level, what will the income or loss from operations be for the following year? 8Based on the data given, would you accepting the proposal? Explain

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!