Homework Help is Here – Start Your Trial Now!
Business
Accounting
Kylie's Cookies is considering the purchase of a larger oven that will cost $2,200 and will increase her fixed costs by $61. What would happen if she purchased the new oven to realize the variable cost savings of $0.10 per cookie, and what would happen if she raised her price by just $0.20? She feels confident that such a small price increase will decrease the sales by only 30 units and may help her offset the increase in fixed costs. Given the following current prices how would the break-even in units and dollars change if she doesn't increase the selling price and if she does increase the selling price? Complete the monthly contribution margin income statement for each of these cases. Round your answers to two decimal places. Round break-even units to a whole number. Selling Price, Variable Cost and Fixed Cost Change Analysis With Decreased With Increased SP, With Current VC and Decreased VC, Price Increased FC and Increased FC Sales Price per Unit $1.75 $4 1.75 V 1.95 V Variable Cost per Unit 0.30 0.20 V 0.20 Contribution Margin per Unit $1.45 $ 1.55 V 1.75 V Fixed Costs $435 496 496 Break-even in Units 300 Break-even in Dollars $525

Kylie's Cookies is considering the purchase of a larger oven that will cost $2,200 and will increase her fixed costs by $61. What would happen if she purchased the new oven to realize the variable cost savings of $0.10 per cookie, and what would happen if she raised her price by just $0.20? She feels confident that such a small price increase will decrease the sales by only 30 units and may help her offset the increase in fixed costs. Given the following current prices how would the break-even in units and dollars change if she doesn't increase the selling price and if she does increase the selling price? Complete the monthly contribution margin income statement for each of these cases. Round your answers to two decimal places. Round break-even units to a whole number. Selling Price, Variable Cost and Fixed Cost Change Analysis With Decreased With Increased SP, With Current VC and Decreased VC, Price Increased FC and Increased FC Sales Price per Unit $1.75 $4 1.75 V 1.95 V Variable Cost per Unit 0.30 0.20 V 0.20 Contribution Margin per Unit $1.45 $ 1.55 V 1.75 V Fixed Costs $435 496 496 Break-even in Units 300 Break-even in Dollars $525

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 5PA: Kylies Cookies is considering the purchase of a larger oven that will cost $2,200 and will increase...
See similar textbooks
icon
Related questions
Question

Kylie's Cookies is considering the purchase of a larger oven that will cost $2,200 and will increase her fixed costs by $61. What would happen if she purchased the new oven to realize the variable cost savings of $0.10 per cookie, and what would happen if she raised her price by just $0.20? She feels confident that such a small price increase will decrease the sales by only 30 units and may help her offset the increase in fixed costs. Given the following current prices how would the break-even in units and dollars change if she doesn't increase the selling price and if she does increase the selling price? Complete the monthly contribution margin income statement for each of these cases.

Round your answers to two decimal places. Round break-even units to a whole number.

Selling Price, Variable Cost and Fixed Cost Change Analysis
  With Current
Price		 With Decreased
VC and
Increased FC		 With Increased SP,
Decreased VC,
and Increased FC
Sales Price per Unit      
Variable Cost per Unit      
Contribution Margin per Unit      
Fixed Costs      
Break-even in Units      
Break-even in Dollars      


Monthly Contribution Margin Income Statement
  With Current
Price		 With Decreased
VC and
Increased FC		 With Increased SP,
Decreased VC,
and Increased FC
Unit Sales, Expected      
Sales      
Variable Costs      
Contribution Margin      
Fixed Costs      
Net Income      
 

 

Monthly Contribution Margin Income Statement With Decreased With Increased SP, With Current VC and Decreased VC, Price Increased FC and Increased FC Unit Sales, Expected 800 Sales $ $ Variable Costs Contribution Margin $4 $4 Fixed Costs Net Income $ $ $
Transcribed Image Text:Monthly Contribution Margin Income Statement With Decreased With Increased SP, With Current VC and Decreased VC, Price Increased FC and Increased FC Unit Sales, Expected 800 Sales $ $ Variable Costs Contribution Margin $4 $4 Fixed Costs Net Income $ $ $
Kylie's Cookies is considering the purchase of a larger oven that will cost $2,200 and will increase her fixed costs by $61. What would happen if she purchased the new oven to realize the variable cost savings of $0.10 per cookie, and what would happen if she raised her price by just $0.20? She feels confident that such a small price increase will decrease the sales by only 30 units and may help her offset the increase in fixed costs. Given the following current prices how would the break-even in units and dollars change if she doesn't increase the selling price and if she does increase the selling price? Complete the monthly contribution margin income statement for each of these cases. Round your answers to two decimal places. Round break-even units to a whole number. Selling Price, Variable Cost and Fixed Cost Change Analysis With Decreased With Increased SP, With Current VC and Decreased vC, Price Increased FC and Increased FC Sales Price per Unit $1.75 2$ 1.75 1.95 Variable Cost per Unit 0.30 0.20 V 0.20 Contribution Margin per Unit $1.45 1.55 $ 1.75 Fixed Costs $435 496 496 Break-even in Units 300 Break-even in Dollars $525
Transcribed Image Text:Kylie's Cookies is considering the purchase of a larger oven that will cost $2,200 and will increase her fixed costs by $61. What would happen if she purchased the new oven to realize the variable cost savings of $0.10 per cookie, and what would happen if she raised her price by just $0.20? She feels confident that such a small price increase will decrease the sales by only 30 units and may help her offset the increase in fixed costs. Given the following current prices how would the break-even in units and dollars change if she doesn't increase the selling price and if she does increase the selling price? Complete the monthly contribution margin income statement for each of these cases. Round your answers to two decimal places. Round break-even units to a whole number. Selling Price, Variable Cost and Fixed Cost Change Analysis With Decreased With Increased SP, With Current VC and Decreased vC, Price Increased FC and Increased FC Sales Price per Unit $1.75 2$ 1.75 1.95 Variable Cost per Unit 0.30 0.20 V 0.20 Contribution Margin per Unit $1.45 1.55 $ 1.75 Fixed Costs $435 496 496 Break-even in Units 300 Break-even in Dollars $525
Expert Solution
Step 1

Given,

Sales Price per Unit $1.75    
Variable Cost per Unit 0.30    
Contribution Margin per Unit $1.45    
Fixed Costs $435    
Break-even in Units 300    
Break-even in Dollars $525    
Unit Sales, Expected 800    
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Break-even Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
SEE MORE TEXTBOOKS