Shaw Landscapes (SL) develops and sells plans for various types of gardens and outdoor spaces. Customers...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Shaw Landscapes (SL) develops and sells plans for various types of gardens and outdoor spaces. Customers use the plans to install various landscape features such as gardens, ponds, walls, etc. The operating budget for 2023 called for 3,000 units to be produced and sold. Budgeted Income per unit - FY2023 Revenue $2,400 Direct Labor (13 hrs @ $50 per hr) $650 Variable overhead (production) $225 Fixed overhead (production) $300 Gross Margin $1,225 Marketing and administrative costs (all fixed) $750 Operating Income per unit before taxes Tax Expense @ 21% Operating Income per unit after taxes $475 $99.75 $375.25 What is the break even number of plans based on current costs? Shaw Landscapes (SL) develops and sells plans for various types of gardens and outdoor spaces. Customers use the plans to install various landscape features such as gardens, ponds, walls, etc. The operating budget for 2023 called for 3,000 units to be produced and sold. Budgeted Income per unit - FY2023 Revenue $2,400 Direct Labor (13 hrs @ $50 per hr) $650 Variable overhead (production) $225 Fixed overhead (production) $300 Gross Margin $1,225 Marketing and administrative costs (all fixed) $750 Operating Income per unit before taxes $475 Tax Expense @ 21% Operating Income per unit after taxes $99.75 $375.25 In preparing the budget for FY2024, SL is considering a price increase of 5% per unit. No changes in either variable costs per unit or total fixed costs are anticipated from the FY2023 budget presented above. Management does believe that the price increase would decrease the total number of plans sold to 2,800 units. Calculate the net change in total after tax operating profit under the two scenarios. Present your answer as the budgeted after tax operating profit in FY2024 less the budgeted after tax operating profit in FY2023. Shaw Landscapes (SL) develops and sells plans for various types of gardens and outdoor spaces. Customers use the plans to install various landscape features such as gardens, ponds, walls, etc. The operating budget for 2023 called for 3,000 units to be produced and sold. Budgeted Income per unit - FY2023 Revenue $2,400 Direct Labor (13 hrs @ $50 per hr) $650 Variable overhead (production) $225 Fixed overhead (production) $300 Gross Margin $1,225 Marketing and administrative costs (all fixed) $750 Operating Income per unit before taxes Tax Expense @ 21% Operating Income per unit after taxes $475 $99.75 $375.25 What is the break even number of plans based on current costs? Shaw Landscapes (SL) develops and sells plans for various types of gardens and outdoor spaces. Customers use the plans to install various landscape features such as gardens, ponds, walls, etc. The operating budget for 2023 called for 3,000 units to be produced and sold. Budgeted Income per unit - FY2023 Revenue $2,400 Direct Labor (13 hrs @ $50 per hr) $650 Variable overhead (production) $225 Fixed overhead (production) $300 Gross Margin $1,225 Marketing and administrative costs (all fixed) $750 Operating Income per unit before taxes $475 Tax Expense @ 21% Operating Income per unit after taxes $99.75 $375.25 In preparing the budget for FY2024, SL is considering a price increase of 5% per unit. No changes in either variable costs per unit or total fixed costs are anticipated from the FY2023 budget presented above. Management does believe that the price increase would decrease the total number of plans sold to 2,800 units. Calculate the net change in total after tax operating profit under the two scenarios. Present your answer as the budgeted after tax operating profit in FY2024 less the budgeted after tax operating profit in FY2023.
Expert Answer:
Related Book For
Posted Date:
Students also viewed these accounting questions
-
5 Melbourne Corporation has traditionally made a subcomponent of its major product. Annual production of 30,000 subcomponents results in the following costs: Direct materials Direct labor Variable...
-
Hummer Company purchased a delivery truck. The total cash payment was $30,020, including the following items. Negotiated purchase price..........................$24,000 Installation of special...
-
Last month some of your friends were injured in an accident. Their total injuries were as follows: Brenda $ 85,000 Raquel $ 125,000 Louis $ 40,000 Coverage was 100/300/50. What was the total injury...
-
Larry Riley formed a rental agreement for a self-storage unit with Iron Gate Self Storage in December 2003. The agreement stated that a maximum of \($5,000\) of personal property could be stored in...
-
Java manufactures coffee mugs that it sells to other companies for customizing with their own logos. Java prepares flexible budgets and uses a standard cost system to control manufacturing costs. The...
-
Problem 5. [20 pts] Verify Green's Theorem for the following vector field and region D. Namely, compute both, the line integral and the double integral. x1 1. (10pts) F (1,-1). and D is the square...
-
Mary Janes Beauty Shop has recently invested money to add more equipment to enable more services to be offered at the shop. Given the following information evaluate their investment.
-
Autoliv is a world-class example of lean manufacturing. This Fortune 500 company makes automotive safety components such as seat belts, airbags, and steering wheels, and has over 80 plants in more...
-
1. A rocket in space (meaning air friction is non-existent) is burning its engines which creates a constant unbalanced forward force on the rocket. This constant force is applied to the rocket as...
-
What are your core beliefs (values) and their origins? the best 4 for leadership and teamwork and the reasons you feel that way and how did those core beliefs influence your perspective/approach to...
-
The characteristics of the dry cargo bulk freight market have caused some economists to conclude that it demonstrates many of the characteristics of the perfectly competitive market. (a) Explain the...
-
Often the term power is correlated with leadership. Nevertheless, power in leadership is far more complex than this term. Discuss the types of power and the significance of each type. Describe if...
-
Jupiter Manufacturing Glass containers for Laboratories (test tubes, graduated beakers, etc.) Jupiter Manufacturing produces glass containers used in laboratories for testing. They run several...
-
Crane Corporation had the following items in inventory as at December 31, 2017: Item No. Quantity Unit Cost NRV A1 160 $6.00 $6.40 B4 210 3.00 2.70 C2 180 12.00 13.30 D3 180 10.00 9.80 Assume that...
-
Suppose that you are part of a virtual team and must persuade other team members on an important matter (such as switching suppliers or altering the project deadline). Assuming that you cannot visit...
-
Littlefield Partners produce a part sold to agricultural equipment suppliers. For the last year (Year 1), the price, costs, and volume of the part were as follows: Managers at Littlefield believe...
-
Lasky Manufacturing has two divisions: Carolinas and Northeast. Lasky has a cost of capital of 7.5 percent. Selected financial information (in thousands of dollars) for the first year of business...
-
Many firms in the service industry have empowered their customer-facing employees to handle service complaints on the spot rather than having the customer contact a corporate customer service center....
-
Preventing a user who approves a configuration change from being the person who implements the change is an example of which of the following? A. Rotation of duties B. Least privilege C. Segregation...
-
A onedimensional heat conduction problem can be expressed by the following differential equation: where \(k\) is the thermal conductivity, \(T(x)\) is the temperature, and \(Q\) is heat generated per...
-
Consider a simply supported beam of length \(L\) subjected to a uniformly distributed transverse load \(p(x)=p_{0}\). Use the Rayleigh-Ritz method to determine the transverse deflection \(v(x)\) of...
Study smarter with the SolutionInn App