QUESTION 3Covid2020 Furniture is operating at almost 100% capacity. The company expects sales to increaseby 20% in 2020. To satisfy the demand for its products, the company is considering twoalternatives:• The first alternative would increase fixed costs by 15% but not affect variable costs.• The second alternative would not affect fixed costs but increase variable costs to 60% ofthe selling price of the company's product.Covid2020 Furniture's income statement for 2019 is as follows:SalesRM1,800,000Costs:VariableFixedIncome before taxesRM810,000RM165,000RM975,000RM825,000REQUIRED:(a)Determine the break-even point in sales dollars for 2020 under the first alternative.(b)Determine the break-even point in sales dollars for 2020 under the second alternative.(c)Determine projected income before taxes for 2020 under each of the alternatives.(d)Which alternative would you recommend? Why?

“Since you have asked multiple sub-parts, we will solve the first three sub-parts for you. If you…

Answered: QUESTION 3 Covid2020 Furniture is…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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1. Multiplicationtable: (No need the explanation just the answer pls)A manufacturer has invested P750,000 in a new product and wants to set a price to earn a 15 percent ROI. The cost per unit is P18 and the company expects to sell 50,000 units in the first year. The company's target-return price for this product is P ______. a. 18.23 b.20.25 c.20.70 d.18.10 e.25.202. A ballpen manufacturer have the following costs and expected sales: Variable cost P 10.00 Fixed cost P300,000.00Expected unit sales 50,000 Break-even volume will be P______. a. 30,000 b. 35,000 c. 20,000 d. 25,000 3. If the cost of manufacturing a product is P30 and the item sells for P50, the markup percentage is _____ %. a. 67.7 b. 67.6 c. 66.7 d. 66.8
An industry is going to launch a new product in the market in the year 2018. The data pertaining to the costs and the estimated sales is provided as follows 1. Fixed cost for the year 2018-2019 is 20000$. 2. The variable cost per unit is 12$. 3. The estimated sales are 800000$. 4. If each unit is sold at 30$. Find out 1. Break-even point. 2. The profit at a turn-over of 25000 units. 3. Margin of safety in terms of units and sales. 4. If a profit target is 1200000$, compute the turn over required. 5. Also construct the break-even chart and show the details on it.
Question 3: Sohar Company's financial information is given in the table below. Sales (OMR) Fixed Costs 405000 Year Variable Costs 2019 90000 225000 2020 450000 120000 240000 Calculate: a) PV ratio, b) B.E.P in units and Sales c) Sales required to earn a profit of OMR 40000.Each year is separate, you should calculate the required values for both years. d) Margin of safety at a profit of OMR 50000 e) Profit when sales are OMR. 200000.
Cost Problem Taino Ventilators, Inc. makes a variety of ventilators. One of these products is a Ventilators model: Super Air-XL. This model includes the ultimate in technology and is in strong demand. Expected demand for this year is 57,000 units. Full production capacity for SuperAir--XL is 64,000 units, but 57,000 units are considered normal capacity. The following unit price and breakdown is applicable in 2022: Per Unit Sales Price Less manufacturing costs: $685.00 Materials $66.00 $22.00 $23.00 $26.00 $137.00 $548.00 Direct Labor Overhead: Variable Fixed Total manufacturing costs Gross Margin Less selling and administrative expenses Selling: Variable Fixed Administrative, Fixed Masks Options, variable* Total selling and administrative expenses |Net Profit before taxes $5.00 $46.00 $72.00 $59.00 $182.00 $366.00 During December, the company received 2 special orders request from: Custco-Medical and Laboratory-Apex. These orders are not part of the budgeted 57,000 units sales of…
For XYZ Company , how many units of their product would have to be sold to yield a target operating income of $92,000 for the financial year ending 2021, assuming variable costs are $50 per unittotal fixed costs are \$8, , and the unit selling price is $60 ? a. 800 units b. 2,000 units c. 10,000 units d. 9,200 units
View Policies Current Attempt in Progress pport Werth Company produces tie racks. Its estimated fixed costs for the year are $288,000, and the estimated variable costs per unit are $14. Werth expects to produce and sell 60,000 racks at a price of $20 per unit. How many units will be sold at breakeven? D48,000. O 20,571. 3,600. O 14,400.
PROBLEM 8. The Color Company manufactures and sells two products. The selling prices and variable costs of the products are as follows: Blujets Blupens Selling prices Variable costs P20 P40 8 24 The sales for 2021 were in the ratio of 3 Blujets to 1 Blupen. Sales volume for 2021 was P1 million. Fixed costs for 2020 amounted to P390,000. Requirements: 1. Compute the number of units sold in 2021 for each product. 2. Compute the breakeven sales in pesos and in units. 3. Compute the composite breakeven for the company.
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Question 3: Oman Company's financial information is given in the table below. Year Sales (OMR) Fixed Costs 445000 Variable Costs : 2020 105000 245000 2021 500000 150000 280000 You are required to calculate the following values for each year. The years are independent of each other. a) P/V ratio, b) В.Е.P. c) Sales required to earn a profit of OMR 45000. d) Margin of safety at a profit of OMR 50000 e) Profit when sales are OMR. 300000.
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Question 2 XYZ Company produces and sells only two products since year 2000. Data concerning those products for March 2020 appear below: Product A Product B March Sales $25,000 $27,000 March Variable costs $7,000 $8,600 March Fixed costs $32,860 Required: As a Senior Manager at XYZ Company, your General Manager asked you to determine the total sales of the company in $ for product A and for product B that should be achieved to cover both variable and fixed costs for the month of March by using the company's contribution margin. The level of competition in the market was acceptable and manageable by the Company. In March, 2020, a new potential competitor is doing a market research to decide on entering the market with a product similar to Product A. The General Manager asked for your advice if the company should shift the sales mix toward Product B with no change in total sales (as the sales of product B is more than product…
PROBLEM 2. Outlast Company's projected profit for the coming year follows: Per Unit Total P200,000 (120,000) 80,000 (64,000) P 16,000 Sales Less: Variable costs P20 (12) P 8 Contribution margin Less Fixed expenses Income 4. Suppose Outlast would like to earn operating income equ to 20 percent of sales revenue. How many units must be sold for this goal to be realized? 5. For the projected level of sales, compute the margin of safety.

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