Compute the overall break-even point in dollars for the

Assignment Help Accounting Basics
Reference no: EM13982728

Gogan Company manufactures and sells two products: Basic and Deluxe. Monthly sales, CM ratios, and the CM per unit for the two products are shown below:

 

Basic

Deluxe

Total

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..

$600,000

$400,000

$1,000,000

Contribution margin ratio . . . . . . . . . . . . .

60%

35%

?

Contribution margin per unit . . . . . . . . . .

$9.00

$11.50

?

The company's fixed expenses total $400,000 per month.

Required:

1. Prepare a contribution format income statement for the company as a whole.
2. Compute the overall break-even point in dollars for the company based on the current sales mix.
3. Compute the overall break-even point in units for the company based on the current sales mix.
4. If sales increase by $50,000 per month, by how much would you expect operating income to increase? What are your assumptions?
5. If sales increase by 5,000 units per month, by how much would you expect operating income to increase? What are your assumptions?

Reference no: EM13982728

Questions Cloud

What would be effect of linear polarizing filter be on wave : What would be the effect of a linear polarizing filter (placed at a 45o to the polarization direction of the wave) be on the wave?
Probability that grundig will be dumped : The decision required a simple majority of nine decision-making shareholders. If each is believed to have a 0.25 probability of voting yes on the issue, what is the probability that Grundig will be dumped?
How is everyone doing on feynman spin-statistics challenge : "Spin statistics" is of course the shorthand way of referencing a most curious fact about the universe, which is this: If a particle of any type has a "spin" measured in whole units of quantized angular momentum, it will be a boson, a group that i..
The paper is well organized and every explanation : Follow the five steps of persuasion: establishing credibility, acknowledging the audience's position, constructing a rationale, transplanting root e lements, and asking for a response.
Compute the overall break-even point in dollars for the : Gogan Company manufactures and sells two products: Basic and Deluxe. Monthly sales, CM ratios, and the CM per unit for the two products are shown below:  Prepare a contribution format income statement for the company as a whole. Compute the overall b..
To promote the new minor league hockey team : To promote the new minor league hockey team coming to town, the owners of the team, H.K. Enterprises, announces a contest to name and create a mascot for the team, offering the winner a prize of $10,000 and season tickets for life.
When an arbitrator gives an award in an alternative dispute : When an arbitrator gives an award in an alternative dispute resolution can a court reassess the award based on an error of facts motion?
Define leadership and communication : Define leadership and communication. Explain how these two relate to one another in the workplace. Explain the communication process that occurs in the workplace, and describe how it is similar or different for leaders, manager, and followers
Compute the weights for your companys equity and debt : Compute the weights for your companys equity and debt based on the market value of equity and the market value of debt and calculate your companys WACC.

Reviews

Write a Review

Accounting Basics Questions & Answers

  What is the adjusted basis of the property

In 2010, Tina Turnips gave property with an adjusted basis of $63,000 to Sally when the fair market value was $163,000. Gift taxes paid on the property were $30,000, and the taxable gift was $150,000. What is the adjusted basis of the property to ..

  Compute accrual-basis net income

Of the amount paid, $30,000 was for expenses incurred on account in 2010. In addition, Leno incurred $142,000 of expenses in 2011 which will not be paid until 2012.

  Deduction for state income taxes on federal return

On April 12, 2009, he files his state return for 2008 claiming a refund of $900. Ernest receives the refund on August 3, 2009. If Ernest itemizes deductions, how much may he claim as a deduction for state income taxes on his Federal return for cal..

  How will options affect his financial statements

Rick Flowers needs a few new trucks for his business. He is considering buying the trucks but is concerned that the additional debt he will need to borrow will make his liquidity and solvency ratios look bad. What options does he have other than ..

  Mike owns a snowmobile manufacturing business

Mike owns a snowmobile manufacturing business,

  Moontrust bank has asked the president of wishware products

moontrust bank has asked the president of wishware products inc. for a budgeted income statement and budgeted balance

  Best course of action in financing purchase of car

The interest on the home equity loan is deductible; the interest on the dealer loan is not. Barbara is in the 33% marginal tax rate bracket. Determine her best course of action in financing the purchase of the car.

  Pact company had net income of 972000 based on variable

pact company had net income of 972000 based on variable costing. beginning and ending inventories were 7800 units and

  An insurance company contract with artists to exhibit their

an insurance company contract with artists to exhibit their works to the public. aoti has agreed to pay as well known

  Jenna aracel the owner invested 215000 cash office

aracel engineering completed the following transactions in the month of june.nbspa.jenna aracel the owner invested

  How would accounting software requirements

How would accounting software requirements for large corporations differ from requirements for small companies?

  Monthly financial statements

National Credit and Cash purchased a general liability insurance policy for $2,400 for coverage for the calendar year. The entire $2,400 was charged to Insurance Expense on January 2, 2010. If the firm prepares monthly financial statements, the pr..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd