Memofax Inc. produces memory enhancement kits for fax machines. Sales have been veryerratic, with some months showing a profit and some months showing a loss. Thecompany's contribution format income statement for the most recent month is givenbelow.Sales (12,600 units at $40 per unit $504,000Variable202.40*

Part 2:Explanation:Step 1: Total Variable ExpensesTotal Variable Expenses = Number of Units Sold ×…

Answered: Memofax Inc. produces memory…

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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CVP Analysis, *What IT?" AnalysisKevin Co. projected contribution-format income statement for the upcoming month is shownBelow Sales (500 units) $10000Variable expenses. 4000Contributions margin. 6000Fixed expenses. 1000Net operating income. 5000Required:a.) Compute the breakeven point in units.b) Compute the breakeven paint in dollars.c.) If the company wishes to earn a monthly target profit of $10,000, how many units must be sold each month?d.) Compute the company's margin of safety. State your answer in both dollar and percentage terms,e.) The company's manager thinks that adding a salaried sales staff member at a cost of 52,000 per month will increase sales by $4,000 per month. If he is correct, what will be the net dollar advantage or disadvantage of making this change?t.) Refer to the original data, the company's manager believes that a new production process will improve profitability. He plans to add new machinery that will cut variable expenses…
GIGO Computers has two divisions that manufacture computing devices. Below are the results from last year. Sales Revenue Variable Cost of Goods Sold Fixed Cost of Goods Sold Gross Profit Laptop Tablet Total $ 14,500,000.00 $ 36,000,000.00 $ 50,500,000.00 $9,500,000.00 $ 23,400,000.00 $ 32,900,000.00 $ 1,400,000.00 $ 1,880,000.00 $ 3,280,000.00 3,600,000.00 $ 10,720,000.00 $ 14,320,000.00 1,850,000.00 $ 5,760,000.00 $ 7,610,000.00 840,000.00 $ 1,740,000.00 1,300,000.00 $ 2,500,000.00 2,820,000.00 $ 2,470,000.00 Variable Operating Expenses $ bed Operating Expenses $ Common Fixed Costs $ Operating Income -$ 900,000.00 $ 1,200,000.00 $ 350,000.00 $ G MED Meng Wanzhou, the President of GIGO is not happy that the laptop division is losing money. a) Prepare a segment margin income statement. Fixed cost of goods sold, and fixed operating expenses can be traced to each division. (6 marks) b) Should Meng keep or close the laptop division? (1 mark)
Essex Inc. had sales last year of $80,000, a contribution margin of $12,000 and net income of $3,000. The company sold 8,000 units last year. Based on this information, how many units does Essex need to sell to breakeven? 4,200 6,000 O 4,000 O 7,200 None of the above
Due to erratic sales of Its sole product-a high-capacity battery for laptop computers-PEM, Incorporated, has been experlencing financial difficulty for some time. The company's contribution format Income statement for the most recent month Is glven below: Sales (13,289 units x $20 per unit) Variable expenses Contribution margin Fixed expenses $ 264,889 132,000 132,000 147,000 Net operating loss $ (15,808) Required: 1. Compute the company's CM ratio and Its break-even polnt In unit sales and dollar sales. 2 The president believes that a $6.100 Increase In the monthly advertising budget, combined with an Intensified effort by the sales staff, will Increase unit sales and the total sales by $81,000 per month. If the president Is right, what will be the Increase (decrease) In the company's monthly net operating income? 3. Refer to the original data. The sales manager is convinced that a 10% reduction In the selling price, combined with an Increase of $33.000 In the monthly advertising…
ble Cosled Tissue Te 48A of 11)-Google Chrome elearn.squ.edu.o g System (Academic) XYZ Company's single product has a selling price of $15 per unit. The fixed expenses were $160,000. This year the company reported a net operating income of $100,000. If sales are predicted to increase by 10% next year, how much would the increase in profits be in ($)? of Select one: tion O a. 10,000 O b. 26,000 Oc. 16,250 Od. No change in income Oe. 6,000
Cardiff Electronics Company had the following statement of comprehensive income for the most recent year. Sales (17,000 units). Less: Variable expenses. Contribution. Less: Fixed expenses. Profit. Given this data, the contribution per unit was: Select one: O A. £2 O B. £15 O C. £6 O D. £4 £357,000 225,000 102,000 68,000 £ 34,000
Computate Inc. produces microprocessors for laptops. Last year, the company recognized revenues of $4,000,000. Total costs for the period were $2,000,000, of which $500,000 were fixed. If sales were to increase by $150,000, by how much would Computate’s operating income increase?
1. Aladin Company Manufactures small battery that is used in clocks, toys and some other electronic devices. The last month's income statement of Aladin is given below: Sales (30,000 batteries) Less variable expenses Contribution Margin Fixed expenses Net operating income Total $300,000 $180,000 $120,000 $100,000 $20,000 Per Unit $10 $6 $4 Required: Prepare Aladin's new income statement under each of the following conditions: 1. The sales colume increase by 15%. 2. The selling price decreases by 20% per unit, and the sales volume increase by 30%. 3. The selling price increases by 50% per unit, fixed expenses increase by $20,000 and the sales volume decreases by 5%. 4. Variable expenses increases by 20% per unit, the selling price increase by 12%, and the sales volume decrease by 10%.
Due to erratic sales of Its sole product--a high-capacity battery for laptop computers-PEM, Incorporated, has been experlencing financial difficulty for some time. The company's contribution format Income statement for the most recent month Is glven below. Sales (13,289 units x $20 per unit) Variable expenses Contribution margin Fixed expenses $ 264,889 132,000 132,000 147,000 $ (15,000) Net operating loss Required: 1. Compute the company's CM ratio and Its break-even point in unit sales and dollar sales. 2 The president believes that a $6.100 Increase In the monthly advertising budget, combined with an Intensified effort by the sales staff, will Increase unit sales and the total sales by $61,000 per month. If the president is right, what will be the Increase (decrease) In the company's monthly net operating Income? 3. Refer to the original data. The sales manager is convinced that a 10% reduction In the selling price, combined with an Increase of $33,000 in the monthly advertising…
Due to erratic sales of Its sole product-a high-capacity battery for laptop computers-PEM, Incorporated, has been experlencing financial difficulty for some time. The company's contribution format Income statement for the most recent month Is given below: Sales (13,280 units x $28 per unit) Variable expenses Contribution margin Fixed expenses $ 264,809 132,000 132,000 147,880 Net operating loss $ (15,000) Required: 1. Compute the company's CM ratio and Its break-even point in unit sales and dollar sales. 2 The president believes that a $6.100 Increase in the monthly advertising budget, combined with an Intensified effort by the sales staff, will Increase unit sales and the total sales by $61,000 per month. If the president is right, what will be the Increase (decrease) In the company's monthly net operating Income? 3. Refer to the original data. The sales manager is convinced that a 10% reduction In the selling price, combined with an Increase of $33,000 in the monthly advertising…
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (7,500 units) $ 290500 $ 35.00 Variable expenses 149400 18.00 Contribution margin 141100 $ 17.00 Fixed expenses 54,100 Net operating income $ 87000 (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 40 units? 2. What would be the revised net operating income per month if the sales volume decreases by 40 units? 3. What would be the revised net operating income per month if the sales volume is 7300 units?
Due to erratic sales of Its sole product--a high-capacity battery for laptop computers-PEM, Incorporated, has been experlencing financial difficulty for some time. The company's contribution format Income statement for the most recent month Is glven below: Sales (13,280 units x $28 per unit) Variable expenses Contribution margin Fixed expenses $ 264,000 132,000 132,000 147,880 Net operating loss $ (15,000) Required: 1. Compute the company's CM ratio and Its break-even polnt in unit sales and dollar sales. 2 The president believes that a $6.100 Increase In the monthly advertising budget, combined with an Intensified effort by the sales staff, will Increase unit sales and the total sales by $81,000 per month. If the president Is right, what will be the Increase (decrease) In the company's monthly net operating Income? 3. Refer to the original data. The sales manager is convinced that a 10% reduction In the selling price, combined with an Increase of $33,000 in the monthly advertising…

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