Question

Moving Forward Company, a producer of cardboard boxes, has the following information: Income tax rate 40 percent Selling price per unit $2.75 DM per unit $0.75 DL per unit $0.25 Variable MOH per unit $0.75 Total fixed costs $37,500 (round units up to next whole number and dollars to nearest whole dollar (no decimal places0)

a) Calculate break even in units (round units up to next whole number)

b) Calculate break even in dollars.

c) How many units must be sold to obtain a targeted before-tax income of $6,000?

d)How many units must be sold to obtain a targeted after-tax income of $6,000?

Answer #1

a.

Break even points in units = Fixed costs / Contribution margin per unit

Break even points in units = $37,500 / $1 ($2.75-0.75-0.25-0.75) = 37,500 units

b.

Break even in dollars = 37,500 * $2.75 = $103,125

c.

Desired sales units = Fixed costs + Desired profit / Contribution margin per unit

Desired sales units = $37,500 + 6,000 / $1 = 43,500 units

d.

Desired sales units = Fixed costs + Desired profit / Contribution margin per unit

Desired sales units = $37,500 + 10,000($6,000/60%) / $1 = 47,500 units

Christina Company reports the contribution margin income
statement for 2020 below. Using this information, compute Christina
Company's 1) break-even point in units, 2) break-even point in
sales dollars, 3) unit sales to achieve target pretax income, and
4) dollar sales to achieve target pretax income.
Units $ per unit Total Sales 1,700 $200 $340,000
Variable costs 1,700 130 221,000
Contribution margin 119,000
Fixed costs 84,000
Pretax income $35,000
I need the formulas to plug into excel
1) Compute the break-even...

Company expects to produce and sell12,000 units for $80
DM costs are $8
DL is $40
MOH is $12 per unit
Beginning
inventory Target
Ending inventory
Finished goods
inventory 800
units
1000 units
On the 2020 budgeted income statement, what amount will be
reported for sales? (4 points)
A.
$960,000
B.
$860,000
C.
$80,000
D.
$24,000
Company expects to produce and sell12,000 units for $80
DM costs are $8
DL is $40
MOH is $12 per unit
Beginning
inventory Target
Ending inventory
Finished...

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$15,430 per month. The current volume of sales is 200 violins per
month.
Determine the monthly total contribution margin at the current
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Determine the monthly net income (loss) at the current volume
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Targeted operating income
$53,290
Selling price per unit
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Royale Aluminum desires an after-tax income of $500,000. It has
fixed costs of $2,500,000, a unit sales price of $300, and unit
variable costs of $150, and is in the 40% tax bracket.
Required:
1.) What is the break-even point in units?
2.) What is the break-even point in dollars?
3.) How many units needed to earn $500,000 net operating income
when no income tax existed?
4.) What amount of pre-tax income is needed to earn an after-tax
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Wich Brothers sells two kinds of sandwiches – meat and
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Veggie
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Number of sandwiches
9,000
6,000
15,000
Sales
$72,000
$60,000
$132,000
Variable costs
27,000
15,000
42,000
Contribution Margin
45,000
45,000
90,000
Fixed costs
24,000
30,000
54,000
Operating income
$21,000
$15,000
$36,000
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10. Determine the number of units and sales revenue
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Northwood Company manufactures basketballs. The company has a
ball that sells for $25. At present, the ball is manufactured in a
small plant that relies heavily on direct labor workers. Thus,
variable expenses are high, totaling $15.00 per ball, of which 60%
is direct labor cost.
Last year, the company sold 37,500 of these balls, with the
following results:
Sales (37,500 balls)
$
1,125,000
Variable expenses
675,000
Contribution margin
450,000
Fixed expenses
240,000
Net operating income
$
210,000
Required:
1....

Zaldor Corporation sells a specialized speaker and has the
following information for the current year:
Total
Per Unit
Percent of Sales
Sales (20,000 units)
1,200,000
60
100%
Variable expenses
800,000
40
? %
Contribution margin
400,000
20
? %
Fixed expenses
250,000
Net operating income
150,000
Required:
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B. Calculate the contribution margin ratio
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?units
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?r units
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