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Exercise 7-28 Publishing; Contribution Income Statement (LO 7-7, 7-8) Europa Publications, Inc., specializes in reference books...
Exercise 7-28 Publishing; Contribution Income Statement (LO 7-7, 7-8) Europa Publications, Inc., specializes in reference books that keep abreast of the rapidly changing political and economic issues in Europe. The results of the company’s operations during the prior year are given in the following table. All units produced during the year were sold. (Ignore income taxes.) Sales revenue $ 1,750,000 Manufacturing costs: Fixed 572,000 Variable 818,000 Selling costs: Fixed 35,000 Variable 65,000 Administrative costs: Fixed 75,000 Variable 30,000 Required: 1-a. Prepare a traditional income statement for the company. 1-b. Prepare a contribution income statement for the company. 2. What is the firm’s operating leverage for the sales volume generated during the prior year? 3. Suppose sales revenue increases by 14 percent. What will be the percentage increase in net income? 4. Which income statement would an operating manager use to answer
requirement 3?
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Europa Publications, Inc. specializes in reference books that keep abreast of the rapidly changing political and...
Europa Publications, Inc. specializes in reference books that
keep abreast of the rapidly changing political and economic issues
in Europe. The results of the company’s operations during the prior
year are given in the following table. All units produced during
the year were sold. (Ignore income taxes.)
Sales revenue
$
1,750,000
Manufacturing costs:
Fixed
572,000
Variable
818,000
Selling costs:
Fixed
35,000
Variable
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Administrative costs:
Fixed
75,000
Variable
30,000
Required:
1-a. Prepare a traditional income statement for
the company.
1-b....
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Exercise 7-32 Continuation of Preceding Exercise (LO 7-4,
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A contribution income statement for the Nantucket Inn is shown
below. (Ignore income taxes.)
Revenue
$
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Less: Variable expenses
980,000
Contribution margin
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510,000
Net income
$
210,000
Required:
1. Prepare a contribution income statement if the
hotel’s volume of activity increases by 25 percent, and fixed
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2. Prepare a contribution income statement if the
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Problem 12-21 Prepare a contribution margin format income statement; calculate break-even point LO 7, 8, 9,...
Problem 12-21 Prepare a contribution margin format income
statement; calculate break-even point LO 7, 8, 9, 11 Presented here
is the income statement for Big Shot, Inc., for the month of May:
Sales $ 60,500 Cost of goods sold 52,100 Gross profit $ 8,400
Operating expenses 15,700 Operating loss $ (7,300 ) Based on an
analysis of cost behavior patterns, it has been determined that the
company's contribution margin ratio is 16%. Required: a. Rearrange
the preceding income statement to...
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Problem 12-20 Prepare a contribution margin format income
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income statement in the traditional format for a firm with a sales
volume of 16,500 units: Revenues $ 198,000 Cost of goods sold
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($4,750 + $0.35/unit) 10,525 Operating income $ 106,825 Required:
a. Prepare an income statement in the contribution margin format.
b....
Contribution Income Statement Sales (12,000 units) ……………………….. 72,000 Variable expenses ……………………… 48,000 Contribution Margin ………………… 24,000...
Contribution Income Statement
Sales (12,000 units) ………………………..
72,000
Variable expenses ………………………
48,000
Contribution Margin …………………
24,000
Fixed expenses …………………………
10,000
Net Operating Income ……………….
14,000
Jackpot company sells a single product, has provided its
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Required:
Prepare Contribution Income
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Variable Cost
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Polarix is a retailer of ATVs (all-terrain vehicles) and
accessories. An income statement for its Consumer ATV Department
for the current year follows. ATVs sell for $3,800 each. Variable
selling expenses are $270 per ATV. The remaining selling expenses
are fixed. Administrative expenses are 40% variable and 60% fixed.
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POLARIX
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For Year Ended...
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2017.
HUDSON CO.
Contribution Margin Income Statement
For Year Ended December 31, 2017
Sales (10,800 units
at $280 each)
$
3,024,000
Variable costs (10,800 units at
$210 each)
2,268,000
Contribution margin
$
756,000
Fixed costs
567,000
Pretax income
$
189,000
1. Compute Hudson Co.'s break-even point in
units and.
2. Compute Hudson Co.'s break-even point in sales
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that will...
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Question 2
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2018 showed the following:
$
Revenue
8,000
Variable
costs 2,000
Contribution margin
6,000
Fixed
costs 2,000
Operating
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4,000
Required
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2)Calculate the breakeven point in $ revenue.
3)Calculate the operating leverage.
4)Using the operating leverage formula, calculate the new
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$
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...
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