Whirly Corporation's contribution format income statement for the most recent month is shown below: Sales (7,500...
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Whirly Corporation's contribution format income statement for the most recent month is shown below: Sales (7,500 units) Variable expenses Contribution margin Fixed expenses Net operating income. Total $ 240,000 135,000 105,000 55,400 Per Unit $ 32.00 18.00 $ 14.00 $ 49,600 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 30 units? 2. What would be the revised net operating income per month if the sales volume decreases by 30 units? 3. What would be the revised net operating income per month if the sales volume is 6,500 units? 1. Revised net operating income 2. Revised net operating income 3. Revised net operating income Exercise 5-4 (Algo) Computing and Using the CM Ratio [LO5-3] Last month when Holiday Creations, Incorporated, sold 38,000 units, total sales were $152,000, total variable expenses were $124,640, and fixed expenses were $37,300. Required: 1. What is the company's contribution margin (CM) ratio? 2. What is the estimated change in the company's net operating income if it can increase sales volume by 450 units and total sales by $1,800? (Do not round intermediate calculations.) 1. Contribution margin ratio 2. Estimated change in net operating income % Exercise 5-6 (Algo) Break-Even Analysis [LO5-5] Mauro Products distributes a single product, a woven basket whose selling price is $14 per unit and whose variable expense is $12 per unit. The company's monthly fixed expense is $5,400. Required: 1. Calculate the company's break-even point in unit sales. 2. Calculate the company's break-even point in dollar sales. (Do not round intermediate calculations.) 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? (Do not round intermediate calculations.) 1. Break-even point in unit sales 2. Break-even point in dollar sales 3. Break-even point in unit sales 3. Break-even point in dollar sales baskets baskets Exercise 5-7 (Algo) Target Profit Analysis [LO5-6] Lin Corporation has a single product whose selling price is $135 per unit and whose variable expense is $81 per unit. The company's monthly fixed expense is $24,300. Required: 1. Calculate the unit sales needed to attain a target profit of $4,050. (Do not round intermediate calculations.) 2. Calculate the dollar sales needed to attain a target profit of $8,300. (Round your intermediate calculations to the nearest whole number.) 1. Units sales to attain target profit 2. Dollar sales to attain target profit units Exercise 5-14 (Algo) Break-Even and Target Profit Analysis [LO5-3, LO5-4, LO5-5, LO5-6] Lindon Company is the exclusive distributor for an automotive product that sells for $36.00 per unit and has a CM ratio of 30%. The company's fixed expenses are $210,600 per year. The company plans to sell 22,300 units this year. Required: 1. What are the variable expenses per unit? (Round your "per unit" answer to 2 decimal places.) 2. What is the break-even point in unit sales and in dollar sales? 3. What amount of unit sales and dollar sales is required to attain a target profit of $102,600 per year? 4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $3.60 per unit. What is the company's new break-even point in unit sales and in dollar sales? What dollar sales is required to attain a target profit of $102,600? 1. Variable expense per unit 2. Break-even point in units 2. Break-even point in dollar sales 3. Unit sales needed to attain target profit 3. Dollar sales needed to attain target profit 4. New break-even point in unit sales 4. New break-even point in dollar sales 4. Dollar sales needed to attain target profit Whirly Corporation's contribution format income statement for the most recent month is shown below: Sales (7,500 units) Variable expenses Contribution margin Fixed expenses Net operating income. Total $ 240,000 135,000 105,000 55,400 Per Unit $ 32.00 18.00 $ 14.00 $ 49,600 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 30 units? 2. What would be the revised net operating income per month if the sales volume decreases by 30 units? 3. What would be the revised net operating income per month if the sales volume is 6,500 units? 1. Revised net operating income 2. Revised net operating income 3. Revised net operating income Exercise 5-4 (Algo) Computing and Using the CM Ratio [LO5-3] Last month when Holiday Creations, Incorporated, sold 38,000 units, total sales were $152,000, total variable expenses were $124,640, and fixed expenses were $37,300. Required: 1. What is the company's contribution margin (CM) ratio? 2. What is the estimated change in the company's net operating income if it can increase sales volume by 450 units and total sales by $1,800? (Do not round intermediate calculations.) 1. Contribution margin ratio 2. Estimated change in net operating income % Exercise 5-6 (Algo) Break-Even Analysis [LO5-5] Mauro Products distributes a single product, a woven basket whose selling price is $14 per unit and whose variable expense is $12 per unit. The company's monthly fixed expense is $5,400. Required: 1. Calculate the company's break-even point in unit sales. 2. Calculate the company's break-even point in dollar sales. (Do not round intermediate calculations.) 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? (Do not round intermediate calculations.) 1. Break-even point in unit sales 2. Break-even point in dollar sales 3. Break-even point in unit sales 3. Break-even point in dollar sales baskets baskets Exercise 5-7 (Algo) Target Profit Analysis [LO5-6] Lin Corporation has a single product whose selling price is $135 per unit and whose variable expense is $81 per unit. The company's monthly fixed expense is $24,300. Required: 1. Calculate the unit sales needed to attain a target profit of $4,050. (Do not round intermediate calculations.) 2. Calculate the dollar sales needed to attain a target profit of $8,300. (Round your intermediate calculations to the nearest whole number.) 1. Units sales to attain target profit 2. Dollar sales to attain target profit units Exercise 5-14 (Algo) Break-Even and Target Profit Analysis [LO5-3, LO5-4, LO5-5, LO5-6] Lindon Company is the exclusive distributor for an automotive product that sells for $36.00 per unit and has a CM ratio of 30%. The company's fixed expenses are $210,600 per year. The company plans to sell 22,300 units this year. Required: 1. What are the variable expenses per unit? (Round your "per unit" answer to 2 decimal places.) 2. What is the break-even point in unit sales and in dollar sales? 3. What amount of unit sales and dollar sales is required to attain a target profit of $102,600 per year? 4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $3.60 per unit. What is the company's new break-even point in unit sales and in dollar sales? What dollar sales is required to attain a target profit of $102,600? 1. Variable expense per unit 2. Break-even point in units 2. Break-even point in dollar sales 3. Unit sales needed to attain target profit 3. Dollar sales needed to attain target profit 4. New break-even point in unit sales 4. New break-even point in dollar sales 4. Dollar sales needed to attain target profit
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Managerial Accounting
ISBN: 978-1259307416
16th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
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