Question

Markham Company has a contribution margin ratio of 25%. The company is considering a proposal that...

Markham Company has a contribution margin ratio of 25%. The company is considering a proposal that will increase sales by $150,000. What increase in profit can be expected assuming total fixed costs increase by $25,000? (Do not round your intermediate calculations.)

$6,250

$31,250

$37,500

$12,500

A product has a contribution margin of $2.50 per unit and a selling price of $25 per unit. Fixed costs are $20,000. Assuming new technology increases the unit contribution margin by 50 percent but increases total fixed costs by $13,750, what is the new breakeven point in units?

3,667 units

3,333 units

13,500 units

9,000 units

Which of the following software applications is most useful for performing cost-volume-profit sensitivity analysis?

Database software

Spreadsheet software

Presentation software

Word processing software

To get a feel for the impact on profits of various changes in costs and volume levels management should perform:

cost benefit analysis.

sensitivity analysis.

cost analysis.

profitability analysis.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

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
A product has a contribution margin of $9 per unit and a selling price of $55...
A product has a contribution margin of $9 per unit and a selling price of $55 per unit. Fixed costs are $27,000. Assuming new technology increases the unit contribution margin by 50 percent but increases total fixed costs by $16,200, what is the new breakeven point in units?
Mastery Problem: CVP and the Contribution Margin Income Statement For planning and control purposes, managers have...
Mastery Problem: CVP and the Contribution Margin Income Statement For planning and control purposes, managers have a powerful tool known as cost-volume-profit (CVP) analysis. CVP shows how revenues, expenses, and profits behave as volume changes. In CVP analysis, costs are classified according to behavior: variable or fixed. Costs are classified by behavior on the income statement in CVP analysis to arrive at operating income. This format is known as the contribution margin income statement. Complete the following table to illustrate...
Spring Company’s cost structure is dominated by variable costs with a contribution margin ratio of 0.25...
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....
Calculate the breakeven point and contribution margin. Breakeven point Fixed cost Contribution margin Selling price per...
Calculate the breakeven point and contribution margin. Breakeven point Fixed cost Contribution margin Selling price per unit Variable cost per unit units $88,400 $ $9 $5
The Greenback Store’s cost structure is dominated by variable costs with a contribution margin ratio of...
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....
Chapter 5 Cost-Volume-Profit Relationships What is the Contribution income statement? __________________________ __________________________ __________________________ __________________________ __________________________ What...
Chapter 5 Cost-Volume-Profit Relationships What is the Contribution income statement? __________________________ __________________________ __________________________ __________________________ __________________________ What is the gross profit ratio?_____________________________________________ What is the contribution margin ratio?______________________________________ What is the break-even point?_____________________________________________ Give 3 ways of stating breakeven: (relating items from the contribution income statement) _____________________________ _____________________________ _____________________________ What is the formula to find the breakeven number of units?____________________________ How can you determine the number of units necessary to attain a certain level of profit? _____________________________________________________________________________ How can you determine...
E5-3 Calculating Contribution Margin and Contribution Ratio, Preparing Contribution Margin Income Statement [LO 5-5] Morning Dove...
E5-3 Calculating Contribution Margin and Contribution Ratio, Preparing Contribution Margin Income Statement [LO 5-5] Morning Dove Company manufactures one model of birdbath, which is very popular. Morning Dove sells all units it produces each month. The relevant range is 0–2,500 units, and monthly production costs for the production of 2,200 units follow. Morning Dove’s utilities and maintenance costs are mixed with the fixed components shown in parentheses. Production Costs Total Cost Direct materials $ 1,500 Direct labor 6,700 Utilities ($130...
The Greenback Store’s cost structure is dominated by variable costs with a contribution margin ratio of...
The Greenback Store’s cost structure is dominated by variable costs with a contribution margin ratio of 0.40 and fixed costs of $63,900. Every dollar of sales contributes 40 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 0.70 and fixed costs of $276,900. Every dollar of sales contributes 70 cents toward fixed costs and profit. Both companies have sales of $710,000 for the month....
The Greenback Store’s cost structure is dominated by variable costs with a contribution margin ratio of...
The Greenback Store’s cost structure is dominated by variable costs with a contribution margin ratio of 0.30 and fixed costs of $55,200. Every dollar of sales contributes 30 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 $285,200. Every dollar of sales contributes 80 cents toward fixed costs and profit. Both companies have sales of $460,000 for the month....
The Greenback Store’s cost structure is dominated by variable costs with a contribution margin ratio of...
The Greenback Store’s cost structure is dominated by variable costs with a contribution margin ratio of 0.40 and fixed costs of $95,400. Every dollar of sales contributes 40 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 $307,400. Every dollar of sales contributes 80 cents toward fixed costs and profit. Both companies have sales of $530,000 for the month....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT