In the year 2008, Wiggins Processing Company had the following contribution income statement: WIGGINS PROCESSING COMPANY...

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In the year 2008, Wiggins Processing Company had the following contribution income statement: WIGGINS PROCESSING COMPANY Contribution Income Statement For the Year 2008 Sales Variable costs Cost of goods sold Selling and administrative Contribution margin Fixed Costs Factory overhead Selling and administrative Before-tax profit Income taxes (40%) After-tax profit $1,000,000 $400,000 200,000 (600,000) 400,000 180,000 80,000 (260,000) 140,000 (56,000) $84,000 HINT: Round the contribution margin ratio to two decimal places for your calculations below. (a) Determine the annual break-even point in sales dollars. $0 (b) Determine the annual margin of safety in sales dollars. $0 (c) What is the break-even point in sales dollars if management makes a decision that increases fixed costs by $60,000? 0 (c) What is the break-even point in sales dollars if management makes a decision that increases fixed costs by $60,000? 0 (d) With the current cost structure, including fixed costs of $260,000, what dollar sales volume is required to provide an after-tax net income of $190,000? Do not round until your final answer, Round your answer up to the nearest dollar. $0 (e) Prepare an abbreviated contribution income statement to verify that the solution to part (d) will provide the desired after-tax income. Round your answers to the nearest dollar. Use rounded answers for subsequent calculations. Do not use negative signs with any of your answers. WIGGINS PROCESSING COMPANY Income Statement For the Year 2008 Sales Variable costs Contribution margin Fixed costs Net income before taxes Income taxes (40%) Net income after taxes S Check « Previous 0 0 0 0 0 0 Save Answers In the year 2008, Wiggins Processing Company had the following contribution income statement: WIGGINS PROCESSING COMPANY Contribution Income Statement For the Year 2008 Sales Variable costs Cost of goods sold Selling and administrative Contribution margin Fixed Costs Factory overhead Selling and administrative Before-tax profit Income taxes (40%) After-tax profit $1,000,000 $400,000 200,000 (600,000) 400,000 180,000 80,000 (260,000) 140,000 (56,000) $84,000 HINT: Round the contribution margin ratio to two decimal places for your calculations below. (a) Determine the annual break-even point in sales dollars. $0 (b) Determine the annual margin of safety in sales dollars. $0 (c) What is the break-even point in sales dollars if management makes a decision that increases fixed costs by $60,000? 0 (c) What is the break-even point in sales dollars if management makes a decision that increases fixed costs by $60,000? 0 (d) With the current cost structure, including fixed costs of $260,000, what dollar sales volume is required to provide an after-tax net income of $190,000? Do not round until your final answer, Round your answer up to the nearest dollar. $0 (e) Prepare an abbreviated contribution income statement to verify that the solution to part (d) will provide the desired after-tax income. Round your answers to the nearest dollar. Use rounded answers for subsequent calculations. Do not use negative signs with any of your answers. WIGGINS PROCESSING COMPANY Income Statement For the Year 2008 Sales Variable costs Contribution margin Fixed costs Net income before taxes Income taxes (40%) Net income after taxes S Check « Previous 0 0 0 0 0 0 Save Answers

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