A division of XXXX Company changed its production operations from one where a large labor force assembled electronic components to an automated production facility dominated by computer-controlled robots. The change was necessary because of fierce competitive pressures. Improvements in quality, reliability, and flexibility of
Clyde's Marina has estimated that fixed costs per month are $300,000 and variable cost per dollar of sales is $0.40. Required a. What is the break-even point per month in sales dollars? b. What level of sales dollars is needed for a monthly profit of $60,000? c. For the month of July, the marina anticipates sales of $1,
Gabby's Wedding Cakes creates elaborate wedding cakes.Each cake sells for $600.The variable cost of making the cakes is $250,and the fixed cost per month is $7,700. Required a. Calculate the break-even point for a month in units. b. How many cakes must be sold to earn a monthly profit of $10,000?
Andre has asked you to evaluate his business, Andre's Hair Styling. Andre has five barbers working for him. (Andre is not one of them.) Each barber is paid $9.90 per hour and works a 40-hour week and a 50-week year, regardless of the number of haircuts. Rent and other fixed expenses are $1,750 per month. Hair shampoo used on all
Problem #1 A company has a goal of earning $100,000 in after-tax income. The company must pay $28,000 in income tax if it achieves the goal. The contribution margin ratio is 30%. What dollar amount of sales must be achieved to reach the goal if fixed costs are $64,000? Problem #2 Thomas Company has total fixed costs of $
The Fashion Shoe Company operates a chain of women's shoe shops around the country. The shops carry many styles of shoes that are all sold at the same price. Sales personnel in the shops are paid a substantial commission on each pair of shoes sold (in addition to a small basic salary) in order to encourage them to be aggressive
Your nursing home defines output as a patient day. Its present volume is 26,000 patient days. The average cost per day is $90.00. Present revenues and costs are presented below: Revenues Amount Charge Patients (6,000 Patient Days) $750,000 Fixed-Price Patients (20,000 Patient Days) $1,800,000 Total Net Revenues
2-65 CVP and Break-Even Goal: Create an Excel spreadsheet to perform CVP analysis and show the relationship between price, costs, and break-even points in terms of units and dollars. Use the results to answer questions about your findings. Scenario: Phonetronix is a small manufacturer of telephone and communications devi
Argentina Partners is concerned about the possible effects of inflation on its operations. Presently, the company sells 60,000 units for $30 per unit. The variable production costs are $15, and fi xed costs amount to $700,000. Production engineers have advised management that they expect unit labor costs to rise by 15 percent
The following is for a Capital setting: Fixed cost = $4,000,000 Variable costs per member = $200 Enrollment fee per member = $400 Target profit = $600,000 1. Determine the contribution margin for this practice. 2. Determine the accounting break even point in the terms of number of Enrollees. 3. Determine the econo
Posters.co, the company is a small internet retailer of high quality posters. The comapny has $1,000,000 in operating assets and fixed expenses of $150,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $3,000,000 per year. The company's contribution margin is 25% whic
Preppy Co. makes and sells a single product. The current selling price is $30 per unit. Variable costs are $21 per unit, and fixed expenses total $90,000 per month. Sales volume for July totaled 12,000 units. Operating income is presented below: Volume Per unit
Cost Volume profit Orange Hot Berhad produces and sells an average of 200,000 bottles of Orange Hot Chilli Sauce each month. The following costs were available: RM Selling price per bottle 2.00 Variable costs per bottle: Materials and labour 0.80 Selling and distribution 0.40 Fixed monthly costs: R
Green Shades Inc. (GSI) sells hammocks; variable costs are $75 each, and the hammocks are sold for $125 each. GSI incurs $250,000 of fixed operating expenses annually. Required a. Determine the sales volume in units and dollars required to attain a $50,000 profit. Verify your answer by preparing an income statement using
Detroit Disk, Inc. is a retailer for digital video disks. The projected net income for the current year is $600,000 based on a sales volume of 400,000 video disks. Detroit Disk has been selling the disks for $24 each. The variable costs consist of the $15 unit purchase price of the disks and a handling cost of $3 per disk. De
Stratford Company distributes a lightweight lawn chair that sells for $15 per unit. Variable costs are $6 per unit, and fixed costs total $180,000 annually. Required: Answer the following independent questions: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in the sales dollars?
During its 3rd year of business, Pete's Pasta estimates that 415,000 pastas (385,000 meaty pastas and 30,000 veggie) will be made. Direct material costs per unit are $.74 per meaty pasta and $.62 per veggie pasta. Direct labor costs are $2.51 per meaty pasta and $2.78 per veggie pasta. Monthly fixed selling and administrative
Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $20 per unit. Variable costs are $8 per unit, and fixed costs total $180,000 per year. Required: Answer the following independent questions: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in
Phoenix-based CompTronics manufactures audio speakers for desktop computers. The following data relate to the period just ended when the company produced and sold 42,000 speaker sets: Sales ... $4,032,000 Variable costs ....1,008,000 Fixed costs ...... 2,736,000 Management is considering relocating its manufacturing faci
Snowbird Snowboards converts regular snowboards by adding outriggers and seats so that people who use wheelchairs can snowboard. The income statement for last year, in which 500 snowboards were produced and sold, appears here. Revenue 150,000 Expenses Variable product
U05a2 - CVP Analysis, Costing Method P-12.20 CVP Application - What If Questions: Sales Mix Issue. This provides a simple illustration of CVP analysis. CVP application - eliminate product from operations? Body Sculpture, Inc., makes three models of high=performance weight-training benches. Current operating data are summar
Johnson, Inc. projects sales for next year will be 70,000 units if the sales price is $30. At this level, unit fixed costs will be $10 while variable costs will be $700,000. The vice president of marketing advises management to reduce sales price to $25 and to undertake a national advertising campaign costing $15,000. a.What
The below information is the operating costs for a lawn service company: depreciation $1500/month advertising $200/month insurance $2,000/month weed and feed materials $13/lawn direct labor $12/lawn fuel $2/lawn The compan
Discuss how a flexible budget lends itself to cost-volume-profit analysis.
Cost Volume Profit Given: Selling price per unit, $40; total fixed expenses, $80,000; variable expenses per unit, $30. Assume that variable expenses are reduced by 20% per unit, and the total fixed expenses are increased by 10%. Find the sales in units to achieve a profit of $20,000, assuming no change in selling price.
Forms, Inc. wants to sell a sufficient quantity of products to earn a profit of $40,000. If the unit sales price is $10, unit variable cost is $8, and total fixed costs are $80,000, how many units must be sold? A) 60,000 units B) 40,000 units C) 15,000 units D) 600,000 units
I. Classifications Part A: Classifications Determine the classification for each cost item based on 2 different schemes. First, determine cost behavior: whether the cost is variable or fixed (relative to the number of units produced); check the appropriate space. Then, determine whether the cost is a product or a perio
1. Readings · Read Ch. 22, 23, 24, 26, & 27 of Business Law: Legal Environment, Online Commerce, Business Ethics, and Interpersonal Issues. 2. Learning Team Assignment: Flexible Budgets · Write a paper in which you discuss flexible budgets. · Explain the relationship between fixed
Can you give an example of cost-volume-profit analysis using this method in your organization or in your past experience?
25. Cost Estimation and regression Analysis: Dali financial services prepares tax returns for small businesses. Data on the company's total costs and output for the past six months appear in the table that follows. The result of the regression analysis are also provided. a. Plot the data and regression line on a graph. b. Est