Question: Please show work and circle answer there is no missing info and the attachment is there please look at attachment to make more sense In
Please show work and circle answer there is no missing info and the attachment is there please look at attachment to make more sense
In the year 2013, Wiggins Processing Company had the following contribution income statement:
WIGGINS PROCESSING COMPANY
Contribution Income Statement
For the Year 2013Sales$ 1,200,000Variable costsCost of goods sold$ 420,000Selling and administrative200,000(620,000)Contribution margin580,000Fixed CostsFactory overheard205,000Selling and administrative80,000(285,000)Before-tax profit295,000Income taxes (36%)(106,200)After-tax profit$ 188,800
(a) Determine the annual break-even point in sales dollars.
Roundcontribution margin ratioto two decimal places foryour calculation.
$Answer
(b) Determine the annual margin of safety in sales dollars.
Use rounded answer from above for calculation.
$Answer
(c) What is the break-even point in sales dollars if management makes a decision that increases fixed costs by $57,000?
Use rounded contribution margin ratio (2 decimal places)foryour calculation.
$Answer
(d) With the current cost structure, including fixed costs of $285,000, what dollar sales volume is required to provide an after-tax net income of $200,000?
Use rounded contribution margin (2 decimal places) for calculation. Round your answer up to the nearest dollar.
$Answer
(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 notusenegative signs with any of your answers.
WIGGINS PROCESSING COMPANY
Income Statement For the Year 2013SalesAnswer
Variable costsAnswer
Contribution marginAnswer
Fixed costsAnswer
Net income before taxesAnswer
Income taxes (36%)Answer
Net income after taxesAnswer
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