Feather Friends, Incorporated, distributes a high-quality wooden birdhouse that sells for $20 per unit. Variable expenses are $12 per unit, and fixed expenses total $140,000 per year. Its operating results for last year were as follows: Sales (24,000 units) 480,000 Variable expenses 288,000 Contribution margin 192,000 Fixed expenses 140,000 Operating income 52,000 Required: Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in sales dollars.
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- Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $160,000 per year. Its operating results for last year were as follows: Sales $ 2,240,000 Variable expenses 1,120,000 Contribution margin 1,120,000 Fixed expenses 160,000 Net operating income $ 960,000 Required: Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in dollar sales. 3. Assume this year’s unit sales and total sales increase by 48,000 units and $3,840,000, respectively. If the fixed expenses do not change, how much will net operating income increase? 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's unit sales to increase by 17%. Using the degree of operating leverage from last year, what percentage increase in net…Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $160,000 per year. Its operating results for last year were as follows: Sales $ 2,240,000 Variable expenses 1,120,000 Contribution margin 1,120,000 Fixed expenses 160,000 Net operating income $ 960,000 Required: Answer each question independently based on the original data: 5. The sales manager is convinced that a 11% reduction in the selling price, combined with a $69,000 increase in advertising, would increase this year's unit sales by 25%. a. If the sales manager is right, what would be this year's net operating income if his ideas are implemented? b. If the sales manager's ideas are implemented, how much will net operating income increase or decrease over last year? 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $1.60 per…Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows: Sales $ 2,000,000 Variable expenses 1,000,000 Contribution margin 1,000,000 Fixed expenses 180,000 Net operating income $ 820,000 Required: Answer each question independently based on the original data: 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's unit sales to increase by 17%. Using the degree of operating leverage from last year, what percentage increase in net operating income will the company realize this year? 5. The sales manager is convinced that a 11% reduction in the selling price, combined with a $64,000 increase in advertising, would increase this year's unit sales by 25%. a. If the sales manager is right, what would be this year's net…
- Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows: Sales $ 2,000,000 Variable expenses 1,000,000 Contribution margin 1,000,000 Fixed expenses 180,000 Net operating income $ 820,000 Required: Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in dollar sales. 3. Assume this year’s unit sales and total sales increase by 59,000 units and $4,720,000, respectively. If the fixed expenses do not change, how much will net operating income increase? 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's unit sales to increase by 16%. Using the degree of operating leverage from last year, what percentage increase in net…Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $200,000 per year. Its operating results for last year were as follows: Sales $ 2,160,000 Variable expenses 1,080,000 Contribution margin 1,080,000 Fixed expenses 200,000 Net operating income $ 880,000 Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in dollar sales. 3. If this year's sales increase by $50,000 and fixed expenses do not change, how much will net operating income increase? 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's sales to increase by 18%. Using the degree of operating leverage from last year, what percentage increase in net operating income will the company realize this year? 5. The sales manager is…Stratford Company distributes a lightweight lawn chair that sells for $15 per unit. Variable expenses are $6 per unit, and fixed expenses total $180,000 annually. 1. Assume that the operating results for last year were as follows:Sales . . . . . . . . . . . . . . . . . . . . . . . $360,000Variable expenses. . . . . . . . . . . . . 144,000Contribution margin . . . . . . . . . . . . 216,000Fixed expenses . . . . . . . . . . . . . . . 180,000Net operating income . . . . . . . . . . $ 36,000Sales (13,500 units at $20 per unit) . . . . . . . $270,000Variable expenses . . . . . . . . . . . . . . . . . . . . 189,000Contribution margin . . . . . . . . . . . . . . . . . . . 81,000Fixed expenses . . . . . . . . . . . . . . . . . . . . . . 90,000Net operating loss . . . . . . . . . . . . . . . . . . . . $ (9,000) a. Compute the degree of operating leverage at the current level of sales. b. The president expects sales to increase by 15% next year. By how much should net operating income…
- Hd.31. Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $25 per unit. Variable expenses are $8 per unit, and fixed expenses total $160,000 per year. Its operating results for last year were as follows: Sales $ 350,000 Variable expenses 112,000 Contribution margin 238,000 Fixed expenses 160,000 Net operating income $ 78,000 Required: Answer each question independently based on the original data: 1. What is the products CM ratio? 2. Use the CM ratio to determine the break-even point in sales dollars. 3. Assume this year's total sales increase by $40,000. If the fixed expenses do not change, how much will operating income increase? Assume that the operating results for last year were as in the question data. 4-a. Compute the degree of operating leverage based on last year's sales. 4-b. The president expects sales to increase by 16% next year. Using the degree of operating leverage from last year, what percentage increase in the operating income will the…Bennington Health purchased three dialysis systems each at an installed cost of $100,000 for different locations in the city. The AOC over 2 years varied as shown. (All values are costs.) The load factor in terms of percentage of clients at each location is shown in decimal form. Find the expected AW of costs for each location at i = 15% per year. Location North South West Load 0.50 0.35 0.15 Year AOC Per Year 0 100,000 100,000 100,000 1 20,000 15,000 12,000 2 8,600 11,500 5,600Crane provides shuttle service between 4 hotels near a medical center and an international airport. Crane uses two 10-passenger vans to offer 12 round trips per day. A recent month's activity in the form of a cost-volume-profit income statement is as follows. Sales (1,400 passengers) Variable costs Fuel Tolls and parking Maintenance Contribution margin Fixed costs Salaries Depreciation (straight-line) Insurance Net income $5,457 2,012 931 13,500 1,700 1,000 $33,600 8,400 25,200 16,200 $9,000
- Cullumber provides shuttle service between 4 hotels near a medical center and an international airport. Cullumber uses two 10- passenger vans to offer 12 round trips per day. A recent month's activity in the form of a cost-volume-profit income statement is as follows. Sales (1,370 passengers) Variable costs Fuel Tolls and parking Maintenance Contribution margin Fixed costs Salaries Depreciation (straight-line) Insurance Net income Break-even point Break-even point $3,836 $ 2,359 655 12,300 1,100 1,000 $34,250 6,850 Calculate the break-even point in (1) sales dollars and (2) number of passengers. 27,400 14,400 $13,000 passengersThe information provided below was taken from the records of Chotoo Projects for the financialyear ended 31 May 2020.Extract of statement of comprehensive income for the year ended 31 May 2020RRevenue 480 000Direct costs 240 000Rent income 150 000Advertising 4 800Salaries and wages 90 000Rates and taxes 1 200Other operating expenses 80 000Additional information1. Revenue is calculated as direct cost plus 25%.2. Revenue is divided equally each month. Revenue is expected to increase by 18% for thefinancial year ending 31 May 2021.POSTGRADUATE DIPLOMA IN PROJECT MANAGEMENT – ACADEMIC AND ASSESSMENT CALENDARREGENT BUSINESS SCHOOL (RBS) January 2021 173. Fifty percent (50%) of the revenue is for cash and the balance is on credit. Debtorsnormally pay their accounts as follows:• 40% in the month of the invoice, and these debtors are entitled toa 5% discount;• 55% one month after the invoice;The balance is usually written off as bad debts.4. Purchases for June and July are expected to be 30…The information provided below was taken from the records of Chotoo Projects for the financial year ended 31 May 2020. Extract of statement of comprehensive income for the year ended 31 May 2020 R Revenue 480 000 Direct costs 240 000 Rent income 150 000 Advertising 4 800 Salaries and wages 90 000 Rates and taxes 1 200 Other operating expenses 80 000 21 Additional information 1. Revenue is calculated as direct cost plus 25%. 2. Revenue is divided equally each month. Revenue is expected to increase by 18% for the financial year ending 31 May 2021. 3. Fifty percent (50%) of the revenue is for cash and the balance is on credit. Debtors normally pay their accounts as follows: 40% in the month of the invoice, and these debtors are entitled to a 5% discount; 55% one month after the invoice; The balance is usually written off as bad debts. 4. Purchases for June and July are expected to be 30 000 per month. All purchases are for cash. 5. In terms of the lease agreement rent is received…