E7-33A Use operating leverage factor to find fixed costs (Learning Objective 5) Popley Manufacturing had a 1.40 operating leverage factor when sales were $60,000. Popley Manufacturing's contribution margin ratio was 35%. What were the company's fixed expenses?
Q: Assume you are the president of High Power Corporation. At the end of the first year of operations…
A: Financial statements are the set of records that tell us about the financial position of the company…
Q: Saratoga Systems produces a single product. The production process requires all material to be…
A: Saratoga Systems produces a single identical product. However, due to high cost only a few units are…
Q: Facts and circumstances: A company produces three different products on several identical machines.…
A: Important Point = Variable cost per unit is (regid) remains constant . It is not change due to…
Q: Factory overhead cost budget Anderson Candy Company budgeted the following costs for anticipated…
A: Factory Overhead Budget :— This budget is prepared to estimate the factory overhead costs incurred…
Q: Ellis company issues a 6.5%, five year bonds dated January 1, 2019, with a $250,000 par value. The…
A: Bonds payable refers to a type of long-term debt that a company or organization issues to borrow…
Q: Sato Awards has had a request for a special order of 10 silver-plated trophies from the provincial…
A: Variable costs are those nature costs which changes with change in activity level. Fixed costs do…
Q: The wages payable and wages expense accounts at February 28, after adjusting entries have been…
A: Wages expense is the amount of money incurred by the entity on the payment of wages to workers and…
Q: rs 25 Required information [The following information applies to the questions displayed below.] On…
A: Warranty expense :— It is calculated by multiplying total monthly sales in dollars with estimated…
Q: Grayson (single) is in the 24 percent tax rate bracket and has sold the following stocks in 2022:…
A: Capital gain or loss:It is the increase or decrease in the value of an asset at a given date or time…
Q: 9. Elijah uses the perpetual inventory system. On July 5, Elijah returned $12,000 of goods purchased…
A: Hi studentSince there are multiple questions, we will answer only first question.Perpetual inventory…
Q: Sandhill provides environmentally friendly lawn services for homeowners. Its operating costs are as…
A: A CVP, or cost-volume-profit, income statement uses the same information to show how changes in…
Q: Suppose this information is available for PepsiCo, Inc. for 2023, 2024, and 2025. (in millions)…
A: Inventory turnover is calculated by dividing cost of goods sold by the average balance of…
Q: May 2: Purchased supplies on account, $500. Date May 2 Accounts and Explanation Debit Credit May 2:…
A: The first step in accounting is the recording of transactions. Transactions are recorded in journal…
Q: Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income…
A: The contribution margin ratio (or CM Ratio) is computed by dividing the per unit contribution margin…
Q: Packaging Solutions Corporation manufactures and sells a wide variety of packaging products.…
A: Variance is the difference between standard cost and actual cost incurred. Variance may be…
Q: Selzik Company makes cake mixes that go through two processing departments-Blending and Packaging.…
A: Work-in process inventory refers to that inventory whose production process is not yet completed.…
Q: Huron Company produces a cleaning compound known as Zoom. The direct materials and direct labor…
A: Material Price Variance = (Standard Price - Actual Price )* Actual Quantity PurchasedMaterial…
Q: Jensen Corporation The following information is available for Jensen Corporation for the current…
A: The equivalent units are calculated on the basis of the percentage of the work completed. For…
Q: Accounts receivable transactions are provided below for J Sandhill Co. Dec. 31, 2023 Mar. 5, 2024…
A: The allowance for uncollectible has normal credit balance. It is prepared to record the estimated…
Q: Ultravision Inc. anticipates sales of $470,000 from January through April. Materials will represent…
A: Budgeted cash payments are the amounts of cash expect to pay based on the forecasted purchase and…
Q: Alyeska Services Company, a division of a major oil company, provides various services to the…
A: Ratio analysis helps to analyze the financial statements of the company. Management can make…
Q: Shadee Corporation expects to sell 600 sun shades in May and 800 in June. Each shade sells for $180.…
A: The sales budget is prepared to estimate the sales for the period.The selling and Administrative…
Q: add, Inc., bought 400 shares of Dey, LLC, for $20 per share and incurred brokerage commissions of…
A: The net income effect indicates whether a financial event or choice has increased or decreased the…
Q: company should use the equity method to account for an investment if O it has the ability to…
A: Significant influence means where entity's (the investor's) capacity to exercise a significant…
Q: The manager of Calypso, Inc. is considering raising its current price of $30 per unit by 10%. If she…
A: Break-even is the amount where in total cost including fixed and variable is equal to its revenue.…
Q: 1. What is the accumulated postretirement benefit obligation at the beginning of 2024?
A: An actuarial obligation known as a "Accumulated Post Retirement Benefit Obligation" (APBO) is the…
Q: ABC Bank is a domestic bank. It reported the following information in preparation of its quarterly…
A: "Total tax payable" is the sum of all the taxes that an individual or business owes to the…
Q: Morning Dove Company manufactures one model of birdbath, which is very popular. Morning Dove sells…
A: The contribution margin per unit is calculated as the difference between sales price and variable…
Q: Bearings & Brakes Corporation (B&B) was incorporated as a private company. The company’s accounts…
A: In the given case, we are provided with the different account balances and we have to summarize the…
Q: Piedmont Company segments its business into two regions-North and South. The company prepared the…
A: The break-even point is the level of sales at which total revenue equals total costs, resulting in…
Q: Aleesia purchased a rental property in April 2017. Her basis for depreciation was $210,000. She has…
A: Form 3115It will be necessary to file Form 3115, with the full amount of inaccurate or omitted…
Q: During the current year, merchandise is sold for $175,700 cash and $654,900 on account. The cost of…
A: Inventory means the detailed list or stock of items, goods, or materials held by a business or…
Q: What is the Markup? Price Cost Markup $40.00 $30.00
A: “Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: Assume the following information for the first year of operations for a company that sells only one…
A: The super-variable costing refers to the costing method in which only direct material cost is…
Q: The general ledger of Pop's Fireworks includes the following account balances in 2024: Accounts…
A: Closing entries are required to close the temporary accounts after making financial (Income…
Q: Addison, Incorporated makes a single product, an indoor fireplace. Data for last year is as follows:…
A: The gross margin is calculated as the difference between the sales and cost of goods sold. The…
Q: F is employed by a public corporation. In year 1, F was granted a stock option to acquire 2,000…
A: In Canada, the tax treatment of stock options follows specific rules. When an employee receives a…
Q: Weatherly Lumber Company processes wood pulp for manufacturing various paper products. The company…
A: Equivalent units are number of units that are completed or manufactured in that period. FIFO is…
Q: Rowe Tool and Die (RTD) produces metal fittings as a supplier to various manufacturing firms in the…
A: Special order decisions are important decisions being taken in business. Under this, incremental…
Q: A piece of equipment is purchased for $110,000 and has an estimated salvage value of $10,000 at the…
A: Deprecation is a method which is used to reduce the book value of a fixed assets due to its regular…
Q: Refer to the following information about the Finishing Department in the Davidson Factory for the…
A: The equivalent units are calculated on the basis of the percentage of the work completed during the…
Q: Real World Financials The table below contains selected information from recent financial statements…
A: Gross profit means excess of sales revenue over cost of goods sold. Gross profit ratio means ratio…
Q: please answer within the format by providing formula the detailed working Please provide answer in…
A: Activity Based Costing (ABC Costing)Under the ABC Costing overheads are allocated on the basis of…
Q: Serotta Corporation is planning to issue bonds with a face value of $440,000 and a coupon rate of 12…
A: Issue price of bonds would be present value of interest annuity & maturity amount at market rate…
Q: Exercise (1) Complete the following table: May 1 2 34 4 95 6 7 8 9 10 Goods Sold for cash Vehicles…
A: Journal entries are a fundamental part of accounting and bookkeeping. They are used to record…
Q: Pietr is 22 years of age. He is currently a GBC student and is working part-time while completing…
A: The term "pensionable earnings" refers to the fraction of a person's income that is taken into…
Q: Builder Products, Incorporated, uses the weighted-average method in its process costing system. It…
A: "Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: Primare Corporation has provided the following data concerning last month's banufacturing…
A: Cost of goods manufactured is the cost incurred on the making of the goods that are to be…
Q: Below is the complete list of accounts of Cobras Incorporated and the related balances. Supplies,…
A: Income statement is a financial statement that records all the income and expenses of the business…
Q: unfavorable, and Answer is complete but not entirely correct. Via Gelato Revenue and Spending…
A: The revenue and spending variance is the difference between the actual and flexible budget data. The…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- E7-34A Compute margin of safety and operating leverage (Learning Objective 5) Terry's Towing Service has a monthly target operating income of $30,000. Variable expenses are 40% of sales, and monthly fixed expenses are $7,500. Requirements 1. Compute the monthly margin of safety in dollars if the shop achieves its income goal. 2. Express Terry's margin of safety as a percentage of target sales. 3. What is Terry's operating leverage factor at the target level of operating income? 4. Assume that the company reaches its target. By what percentage will the company's operating income fall if sales volume declines by 12%?FunTime Cruiseline offers nightly dinner cruises departing from several cities on the east- ern coast of the United States including Charleston, Baltimore, and Alexandria. Dinner cruise tickets sell for $50 per passenger. FunTime Cruiseline's variable cost of providing the dinner is $30 per passenger, and the fixed cost of operating the vessels (depreciation, salaries, docking fees, and other expenses) is $210,000 per month. The company's rel- evant range extends to 20,000 monthly passengers.7-23A Compute breakeven and project income (Learning Objectives 1 & 2)Grover’s Steel Parts produces parts for the automobile industry. The company hasmonthly fixed expenses of $630,000 and a contribution margin of 70% of revenues.Requirements1. Compute Grover’s Steel Parts’ monthly breakeven sales in dollars.2. Use the contribution margin ratio to project operating income (or loss) if revenues are$520,000 and if they are $1,010,000.3. Do the results in Requirement 2 make sense given the breakeven sales you computedin Requirement 1? Explain.
- Required information Learning Objective 05-P2: Compute the break-even point for a single-product company. A company's break-even point for a period is the sales volume at which total revenues equal total costs. To compute a break-even point in terms of sales units, we divide total fixed costs by the contribution margin per unit. To compute a break-even point in terms of sales dollars, divide total fixed costs by the contribution margin ratio. Cost-Volume-Profit Chart Dollars Maximum productive capacity = 1,800 units Sales = $180,000 $1800,000 $160,000 $140,000 $120,000 $100,000 Largest Income = $30,000 $80,000 Maximum productive capacity = 1,800 units Break-Even Point (sales of 800 units or $80,000) Total Sales Total CostsS20-6 Calculating breakeven point in units, contribution margin given Learning Objective 3 Mackler, Inc. sells a product with a contribution margin of $50 per unit. Fixed costs are $8,000 per month. How many units must Mackler sell to break even?w sion o 1om bles 56-3 Compute fixed costs per unit (Learning Objective 2) Scott Equipment produces high-quality soccer balls. If the fixed cost per ball is $3 when the company produces 15,000 balls, what is the fixed cost per ball when it produces 22,500 balls? Assume that both volumes are in the same relevant range.
- S20-7 Calculating breakeven point in units, contribution margin ratio given Learning Objective 3 Ocean Company sells a product with a contribution margin ratio of 80%. Fixed costs are $2,800 per month. What amount of sales (in dollars) must Ocean Company have to break even? If each unit sells for $30, how many units must be sold to break even?FunTime Cruiseline offers nightly dinner cruises departing from several cities on the east- ern coast of the United States including Charleston, Baltimore, and Alexandria. Dinner cruise tickets sell for $50 per passenger. FunTime Cruiseline's variable cost of providing the dinner is $30 per passenger, and the fixed cost of operating the vessels (depreciation, salaries, docking fees, and other expenses) is $210,000 per month. The company's rel- evant range extends to 20,000 monthly passengers.Learning Objective 05-P2: Compute the break-even point for a single-product company. Skip to question A company’s break-even point for a period is the sales volume at which total revenues equal total costs. To compute a break-even point in terms of sales units, we divide total fixed costs by the contribution margin per unit. To compute a break-even point in terms of sales dollars, divide total fixed costs by the contribution margin ratio. Cost-Volume-Profit Chart Current Time 0:00 / Duration 1:56 1x Knowledge Check 01 Based on a CVP graph, select the correct drop-down answer for each question.
- c03 Use target costing to analyze data (Learning Objective 2) See the Winter Sports Inc. data from S8-2. Assume that Winter Sports' reputation has diminished and other resorts in the vicinity are charging only $65 per lift ticket. Winter Sports has become a price-taker and won't be able to charge more than its competitors. At the market price, Winter Sports' managers believe they will still serve 750,000 skiers and snowboarders each season. 1. If Winter Sports can't reduce its costs, what profit will it earn? State your answer in dollars and as a percent of assets. Will investors be happy with the profit level? Show your analysis. 2. Assume that Winter Sports has found ways to cut its fixed costs to $30 million. What is its new target variable cost per skier/snowboarder? Assume investors want to earn a 15% return on assets. Compare this to the current variable cost per skier/ snowboarder. Comment on your results.S20-5 Preparing a contribution margin income statement Learning Objective 2 Gabelman Company sells a product for $95 per unit. Variable costs are $40 per unit, and fixed costs are $2,200 per month. The company expects to sell 570 units in September. Prepare an income statement for September using the contribution margin format.Learning Tasks A. Discussion Questions: 1. Explain why a contribution margin per unit becomes profit per unit above the breakeven point. 2. Suppose a firm with a contribution margin percentage of 30% increased its advertising expenses by P10,000 and found that sales increased by P 30,000. Was it a good decision to increase advertising expenses? Suppose that the contribution margin ratio is now 40%. Would it be a good decision to increase advertising expense? B. Fill in the blanks for each of the following independent cases. Case Revenues Variable Cost Fixed Cost Total Costs Operating Contribution Income Margin Percentage A P500 P- P800 P1,200 2,000 1,000 В 300 200 C 700 1,000 ---- ---- 1,500 300 40% Assessment Task