Question

You have been provided with the following information regarding the Omaha Manufacturing Company: Sales price $50...

You have been provided with the following information regarding the Omaha Manufacturing Company:

Sales price $50
Variable manufacturing cost per unit 24
Variable marketing cost per unit 6
Fixed manufacturing costs 360,000
Fixed administrative costs 80,000


This information is based on forecasted sales of 30,000 units.

Required:

(a) What is the expected operating profit for the upcoming year?
(b) What is the break-even point in units?
(c) If $180,000 of operating profit is desired, how many units must be sold?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

(a) What is the expected operating profit for the upcoming year?

Sales (30000*50) 1500000
Less: Variable manufacturing cost (30000*24) (720000)
Less: Variable marketing cost (30000*6) (180000)
Contribution margin 600000
Less: Fixed manufacturing cost (360000)
Less: Fixed administrative cost (80000)
Net operating income 160000

2. Break even point = (360000+80000)/(50-30) = 22000 units

3. Required sales units = (360000+80000+180000)/20 = 31000 units

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The Kringel company provides the following information: Sales (200,000 units) $500,000 Manufacturing costs: Variable 170,000 Fixed...
The Kringel company provides the following information: Sales (200,000 units) $500,000 Manufacturing costs: Variable 170,000 Fixed 30,000 Selling and administrative costs: Variable 80,000 Fixed 20,000 Required: a. What is the break-even point in units for Kringel? b. What is the variable cost per unit for Kringel? c. What is the contribution margin per unit for Kringel? d. Should a multiple product firm focus on individual product break-even point? Why or why not? Discuss with logical arguments.
AStuart Company reported the following data regarding the product it sells Sales price $ 45 Contribution...
AStuart Company reported the following data regarding the product it sells Sales price $ 45 Contribution margin ratio 20 % Fixed costs $ 360,000 Required Use the contribution margin ratio approach and consider each requirement separately. A.    What is the break-even point in dollars? In units? B.    To obtain a profit of $36,000, what must the sales be in dollars? In units? C.    If the sales price increases to $48 and variable costs do not change, what is the new...
Armilla Manufacturing manufactures a single product.​ Cost, sales, and production information for the company and its...
Armilla Manufacturing manufactures a single product.​ Cost, sales, and production information for the company and its single product is as​ follows: Sales Price Per Unit $44 Variable Manufacturing costs per unit manufactured (DM, DL, and variable MOH) $21 Variable operating expenses per unit sold $4 Fixed manufacturing overhead​ (MOH) in total for the year $221,000 Fixed operating expenses in total for the year $47,000 Units manufactured during the year 17,000 units Units sold during the year 15,000 units 1.Prepare an...
Information concerning a product produced by Ender Company appears here: Sales price per unit $ 162...
Information concerning a product produced by Ender Company appears here: Sales price per unit $ 162 Variable cost per unit $ 89 Total annual fixed manufacturing and operating costs $ 467,200 Required Determine the following: Contribution margin per unit. Number of units that Ender must sell to break even. Sales level in units that Ender must reach to earn a profit of $182,500. Determine the margin of safety in units, sales dollars, and as a percentage.
Information concerning a product produced by Ender Company appears here: Sales price per unit $ 174...
Information concerning a product produced by Ender Company appears here: Sales price per unit $ 174 Variable cost per unit $ 76 Total annual fixed manufacturing and operating costs $ 617,400 Required Determine the following: Contribution margin per unit. Contribution margin ______ per unit Number of units that Ender must sell to break even. Break-Even in units ______ Sales level in units that Ender must reach to earn a profit of $245,000. Sales in units ______ Determine the margin of...
The following information is available for year 1 for Dancer Components: Sales revenue (220,000 units) $...
The following information is available for year 1 for Dancer Components: Sales revenue (220,000 units) $ 6,160,000 Manufacturing cost Materials $ 363,000 Variable cash cost 308,000 Fixed cash cost 708,000 Depreciation (fixed) 2,159,000 Marketing and administrative costs Marketing (variable, cash) 913,000 Marketing depreciation 323,000 Administrative (fixed, cash) 1,099,000 Administrative depreciation 161,000 Total costs $ 6,034,000 Operating profit $ 126,000 Variable marketing costs to change with unit volume. Administrative cash cost is expected to increase by 3 percent. Inventories will be...
he information that follows was obtained from the accounting records of Portofino Manufacturing during a period...
he information that follows was obtained from the accounting records of Portofino Manufacturing during a period when the company sold 104,000 units. Sales revenue $ 9,360,000 Variable costs 3,016,000 Fixed costs 5,856,000 Required: Compute the company's per-unit contribution margin and break-even point in units. How many units must Portofino sell to produce a target profit of $549,000? Assume that Portofino was able to reduce the variable cost per unit by $5. What selling price could management charge if it desired...
The following information is available for year 1 for Pepper Products:    Sales revenue (190,000 units)...
The following information is available for year 1 for Pepper Products:    Sales revenue (190,000 units) $ 3,800,000 Manufacturing costs Materials $ 224,000 Variable cash costs 190,000 Fixed cash costs 438,000 Depreciation (fixed) 1,336,000 Marketing and administrative costs Marketing (variable, cash) 565,000 Marketing depreciation 201,000 Administrative (fixed, cash) 684,000 Administrative depreciation 100,000 Total costs $ 3,738,000 Operating profits $ 62,000     All depreciation charges are fixed and are expected to remain the same for year 2. Sales volume is expected...
Celtics Pro Shop is a merchandiser that provided the following information regarding its 2017 NBA World...
Celtics Pro Shop is a merchandiser that provided the following information regarding its 2017 NBA World Champion sweatshirts : AMOUNT: Number of units sold . . . . . . . . . . . . . . . . . . . . . . . . 40,000 Selling price per unit . . . . . . . . . . . . . . . . . . . . . . . . $30. Variable selling...
Larcker Manufacturing's cost accountant has provided you with the following information for January operations: Direct materials...
Larcker Manufacturing's cost accountant has provided you with the following information for January operations: Direct materials $ 34 per unit Fixed manufacturing overhead costs $ 225,000 Sales price $ 195 per unit Variable manufacturing overhead $ 19 per unit Direct labor $ 25 per unit Fixed marketing and administrative costs $ 195,000 Units produced and sold 5,500 Variable marketing and administrative costs $ 9 per unit b. Determine the variable manufacturing cost per unit. c. Determine the full absorption cost...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT