Question

Basic Cost-Volume-Profit Concepts

Klamath Company produces a single product. The projected income statement for the coming year is as follows:

Sales (47,900 units @ $26.00) | $1,245,400 |

Total variable cost | 398,528 |

Contribution margin | $ 846,872 |

Total fixed cost | 914,056 |

Operating income | $ (67,184) |

**Required:**

**1.** Compute the unit contribution margin and the
units that must be sold to break even.

Unit contribution margin | $ |

Break-even units | units |

**2.** Suppose 10,000 units are sold above
breakeven. What is the operating income?

$

**3.** Compute the contribution margin ratio. Use
the contribution margin ratio to compute the break-even point in
sales revenue.

Contribution margin ratio | % |

Break-even sales revenue | $ |

Suppose that revenues are $200,000 more than expected *for
the coming year.* What would the total operating income
be?

$

Answer #1

Margin of Safety and Operating Leverage
Medina Company produces a single product. The projected income
statement for the coming year is as follows:
Sales (60,000 units @ $23.00)
$1,380,000
Total variable cost
372,600
Contribution
margin
$ 1,007,400
Total fixed cost
973,820
Operating income
$ 33,580
Required:
1. Compute the break-even sales dollars.
$
2. Compute the margin of safety in sales
dollars.
$
3. Compute the degree of operating
leverage.
4. Compute the new operating income if sales
are 20%...

Cost-Volume-Profit, Margin of Safety
Victoria Company produces a single product. Last year’s income
statement is as follows:
Victoria Company
Contribution Margin Income Statement
For the Last Year
1
Sales (29,000 units)
$1,218,000.00
2
Variable cost
812,000.00
3
Total contribution margin
$406,000.00
4
Fixed cost
300,000.00
5
Operating income
$106,000.00
Required:
1.
Compute the break-even point in units and sales dollars
calculated using the break-even units.
2.
What was the margin of safety for Victoria last year in sales
dollars?
3....

Break-Even Units, Contribution Margin Ratio, Margin of
Safety
Khumbu Company's projected profit for the coming year is as
follows:
Total
Per Unit
Sales
$3,331,250
$41.00
Total variable cost
999,375
12.30
Contribution
margin
$ 2,331,875
$ 28.7
Total fixed cost
1,009,369
Operating income
$ 1,322,506
Required:
1. Compute the break-even point in units. If
required, round your answer to nearest whole value.
units
2. How many units must be sold to earn a profit
of $240,000? If required, round your answer...

Break-Even Units, Contribution Margin Ratio, Margin of
Safety
Khumbu Company's projected profit for the coming year is as
follows:
Total
Per Unit
Sales
$2,030,000
$40.00
Total variable cost
568,400
11.20
Contribution margin
$ 1,461,600
$ 28.8
Total fixed cost
539,980
Operating income
$ 921,620
Required:
1. Compute the break-even point in units. If
required, round your answer to nearest whole value.
units
2. How many units must be sold to earn a profit
of $240,000? If required, round your answer...

Break-Even Units,
Contribution Margin Ratio, Margin of Safety
Khumbu Company's
projected profit for the coming year is as follows:
Total
Per Unit
Sales
$3,150,000
$45.00
Total variable cost
819,000
11.70
Contribution
margin
$2,331,000
$ 33.3
Total fixed cost
819,000
Operating income
$1,512,000
Required:
1.
Compute the break-even point in units. If required, round your
answer to nearest whole value.
______ units
2.
How many units must be sold to earn a profit of $240,000? If
required, round your answer to...

Break-Even Units, Contribution Margin Ratio, Margin of
Safety
Khumbu Company's projected profit for the coming year is as
follows:
Total
Per Unit
Sales
$1,700,000
$25.00
Total variable cost
476,000
7.00
Contribution
margin
$ 1,224,000
$ 18
Total fixed cost
504,560
Operating income
$ 719,440
Required:
1. Compute the break-even point in units. If
required, round your answer to nearest whole value.
units
2. How many units must be sold to earn a profit
of $240,000? If required, round your answer...

Break-Even Units, Contribution Margin Ratio, Margin of
Safety
Khumbu Company's projected profit for the coming year is as
follows:
Total
Per Unit
Sales
$3,543,500
$38.00
Total variable cost
1,133,920
12.16
Contribution margin
$ 2,409,580
$ 25.84
Total fixed cost
1,020,528
Operating income
$ 1,389,052
Required:
. Compute the break-even point in units. If
required, round your answer to nearest whole value.
units
2. How many units must be sold to earn a profit
of $240,000? If required, round your answer...

Break-Even Units, Contribution Margin Ratio, Multiple-Product
Breakeven, Margin of Safety, Degree of Operating Leverage
Jellico Inc.'s projected operating income (based on sales of
450,000 units) for the coming year is as follows:
Total
Sales
$11,700,000
Total variable cost
8,190,000
Contribution margin
$3,510,000
Total fixed cost
2,254,200
Operating income
$1,255,800
Required:
1(a). Compute variable cost per unit. Round
your answer to the nearest cent.
$per unit
1(b). Compute contribution margin per unit.
Round your answer to the nearest cent.
$per unit...

Hide or show questions
Progress:10/29 items
Calculator
Break-Even Units, Contribution Margin Ratio, Multiple-Product
Breakeven, Margin of Safety, Degree of Operating Leverage
Jellico Inc.'s projected operating income (based on sales of
450,000 units) for the coming year is as follows:
Total
Sales
$ 9,000,000
Total variable cost
5,310,000
Contribution margin
$ 3,690,000
Total fixed cost
2,476,400
Operating income
$ 1,213,600
Required:
1(a). Compute variable cost per unit. Enter
your answer to the nearest cent.
$per unit
1(b). Compute contribution margin per...

Break-Even Units, Contribution Margin Ratio, Multiple-Product
Breakeven, Margin of Safety, Degree of Operating Leverage
Jellico Inc.'s projected operating income (based on sales of
450,000 units) for the coming year is as follows:
Total
Sales
$ 11,700,000
Total variable cost
6,669,000
Contribution margin
$ 5,031,000
Total fixed cost
2,871,024
Operating income
$ 2,159,976
Required:
1(a). Compute variable cost per unit. Enter
your answer to the nearest cent.
$per unit
1(b). Compute contribution margin per unit.
Enter your answer to the nearest...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 6 minutes ago

asked 8 minutes ago

asked 15 minutes ago

asked 17 minutes ago

asked 21 minutes ago

asked 24 minutes ago

asked 28 minutes ago

asked 29 minutes ago

asked 44 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago