Question

Liu Sales has two store locations. Sanford has fixed costs of $144,000 per month and a contribution margin ratio of 35%. Orlando has fixed costs of $300,000 per month and a contribution margin ratio of 65%. At what sales volume would the two stores have equal profits or losses?

A. $520,000.

B. $444,000

C. $1,120,000

D. N/A

Answer #1

**Answer = $520,000**

Profit = Sales – Variable expenses – Fixed Cost

Profit = Contribution Margin – Fixed Cost

**Profit = (Sales * Contribution Margin Ratio) – Fixed
Cost**

Let sales at which the profit is same = x

Profit for Sanford = (x * 35%) – 144,000

Profit for Orlando = (x * 65%) – 300,000

According to Question, Profit is same. So,

Profit for Sanford = Profit for Orlando

(x * 35%) – 144,000 = (x * 65%) – 300,000

0.35x – 144,000 = 0.65x – 300,000

300,000 – 144,000 = 0.65x – 0.35x

156,000 = 0.3x

X = $520,000

**Sale at which profit will be same =
$520,000**

Candel Gym has sales of $300,000 this month, contribution margin
of $90,000, monthly fixed cost of $54,000 and profit of $36,000.
What is the firm’s current margin of safety ratio to sales [ie.,
safety margin ratio]?

Last month Watchworks Company had a $60,000 loss on sales of
$300,000. Fixed costs are $120,000 a month. Answer the following
questions:
a. What was the contribution margin percentage?
b. What monthly sales volume (in dollars) would be needed to
break-even?
c. What sales volume (in dollars) would be needed to earn
$150,000?

The C&D TV store currently has
fixed costs of $6,000 per month and $400 per TV set. Their sales
price for the TV sets is $700 each, and their current volume is 25
sets per month.
a) Find C&D’s break-even point and their NOI and DOL at the
current level of sales (20 units per month, NOI=$1,500, and
DOL=5).
b) Find C&D’s break-even point and their NOI and DOL if fixed
costs decrease to $4,750 and at the...

The Greenback Store’s cost structure is dominated by variable
costs with a contribution margin ratio of 0.45 and fixed costs of
$103,500. Every dollar of sales contributes 45 cents toward fixed
costs and profit. The cost structure of a competitor, One-Mart, is
dominated by fixed costs with a higher contribution margin ratio of
0.80 and fixed costs of $345,000. Every dollar of sales contributes
80 cents toward fixed costs and profit. Both companies have sales
of $690,000 for the month....

Bosco Company sells boxes of cookies and has total fixed costs
of $200,000 per month. Variable costs are $8 per box, selling price
is $10. The company desires to make a profit of $100,000 per month.
a. What is number of boxes that most be sold to break even each
month? b. What is the contribution margin ratio? c. What is the $
amount of monthly sales needed in order to make the desired monthly
profit

Ripa Company has the following data:
Sales revenue
$360,000
Variable costs
$240,000
Contribution margin
$120,000
Fixed costs
$100,000
Operating income
$ 20,000
What will the contribution margin ratio be at Ripa Company if sales
volume increases by 15%?

Spring Company’s cost structure is dominated by variable costs
with a contribution margin ratio of 0.25 and fixed costs of
$57,200. Every dollar of sales contributes 25 cents toward fixed
costs and profit. The cost structure of a competitor, Winters
Company, is dominated by fixed costs with a higher contribution
margin ratio of 0.70 and fixed costs of $255,200. Every dollar of
sales contributes 70 cents toward fixed costs and profit. Both
companies have sales of $440,000 per month.
a....

1. The Young Company has gathered the following information for
a unit of its most popular product
Direct materials
$
12
Direct labor
6
Overhead (40% variable)
10
Cost to manufacture
28
Desired markup (50%)
14
Target selling price
$
42
The above cost information is based on 10,000 units. A distributor
has offered to buy 2,000 units at a price of $32 per unit. The
distributor claims this special order would not
disturb regular sales at $42. Special packaging...

part 1
Candle Co. has sales of $200,000 this month, contribution
margin of $100,000, monthly fixed cost of $80,000 and profit of
$20,000. What is the firm’s current breakeven volume in dollars?
(rounded)
Select one:
a. All listed choices are incorrect.
b. $160,000.
c. $180,000.
d. $140,000.
part 2
Candle Co. has sales of $200,000 this month, contribution
margin of $100,000, monthly fixed cost of $80,000 and profit of
$20,000. What is the firm’s current breakeven ratio to sales?
(rounded)...

Assume MIX Inc. has sales volume of $1,162,000 for two products
with May sales and contribution margin ratios as follows:
Product A: Sales $454,000; Contribution Margin Ratio 30%
Product B: Sales $708,000; Contribution Margin Ratio 60%
Required:
Assume MIX’s fixed expenses are $318,000. Calculate the May
total contribution margin, operating
income, average contribution margin
ratio, and breakeven sales volume. (Round
"Average contribution margin ratio" answer to 2 decimal places.
Round up "Breakeven sales volume" answer to nearest whole
dollar.)

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 7 minutes ago

asked 8 minutes ago

asked 12 minutes ago

asked 18 minutes ago

asked 27 minutes ago

asked 55 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago

asked 2 hours ago