User Account

All Pages

Construct a contribution margin income statement

Assignment Help Accounting Basics
Reference no: EM132609941

Questions -

Q1. Kerr Manufacturing sells a single product with a selling price of $600 with variable costs per unit of $360. The company's monthly fixed expenses are $72,000.

a. What is the company's break-even point in units?

b. What is the company's break-even point in dollars?

c. Prepare a contribution margin income statement for the month of January when they will sell 500 units.

d. How many units will Kerr need to sell in order to realize a target profit of $120,000?

e. What dollar sales will Kerr need to generate in order to realize a target profit of $120,000?

f. Construct a contribution margin income statement for the month of June that reflects $600,000 in sales revenue for Kerr Manufacturing.

Q2. Delta Co. sells a product for $150 per unit. The variable cost per unit is $90 and fixed costs are $15,250. Delta Co.'s tax rate is 36% and the company wants to earn $44,000 after taxes.

a. What would be Delta's desired pre-tax income?

b. What would be break-even point in units to reach the income goal of $44,000 after taxes?

c. What would be break-even point in sales dollars to reach the income goal of $44,000 after taxes?

d. Create a contribution margin income statement to show that the break-even point calculated in B, generates the desired after-tax income.

Q3. Company A has current sales of $10,000,000 and a 45% contribution margin. Its fixed costs are $3,000,000. Company B is a service firm with current service revenue of $5,000,000 and a 20% contribution margin. Company B's fixed costs are $500,000. Compute the degree of operating leverage for both companies. Which company will benefit most from a 25% increase in sales? Explain why.

Reference no: EM132609941

Questions Cloud

How would treat unabsorbed overheads in cost accounts : APP Limited is a manufacturing concern and recovers overheads at a pre-determined rate of Rs.250, How would treat unabsorbed overheads in cost accounts?
Find the depreciation expense for the first full year : If the salvage value is $1150000, and the useful life is 40 years, find the depreciation expense for the first full year using the straight-line method
Develop product service idea : Develop a product service idea. A. Describe the product/service including the benefits of using the product/service.
Calculate the cost of the prediction error : Estimate of per unit per annum cost of storage proved incorrect and the costs incurred were Rs.60 and Rs.18. Calculate the cost of thw prediction error.
Construct a contribution margin income statement : Construct a contribution margin income statement for the month of June that reflects $600,000 in sales revenue for Kerr Manufacturing
ENSC3011 Fundamentals of Mining Engineering Assignment : ENSC3011 Fundamentals of Mining Engineering Assignment Help and Solution, University of Western Australia - Assessment Writing Service
Elaborate on each of drivers of technology : Are humans the drivers of technology or does technology drive humans? Elaborate on each of the drivers of technology.
What was the amount of conversion cost incurred in march : Raggae Rocks Co., What was the amount of conversion cost incurred in March. Prepare the March cost of goods manufactured schedule.
Find corrected amount for total assets and net income : Sunland Inc. reported total assets of $2391000 and net income of $339000 for the current year. find corrected amount for total assets and net income

Reviews

Write a Review

Accounting Basics Questions & Answers

  Discuss the importance of separation of duties

Discuss the importance of separation of duties within the information systems department. How can Arcadia Plastics have both job rotation

  What was the cost of property-plant and equipment purchased

The Katash Company is a leader in the poultry market. It produces, sells and markets fresh and ice packed commodity chicken and frozen products known.

  Dividends received through common stock-holders

The board of directors declared and paid a $2,000 dividend in 2009. In 2010, $12,000 of dividends are declared and paid. What are the dividends received by the common stockholders in 2010?

  Calculate the earnings per share

The Fitness Studio, Inc.'s 2018 income statement lists the following income and expenses: EBIT = $777,000, Calculate the 2018 earnings per share

  Determine the adjusted cash balance per bank

cashbalance per bank $6,950; outstanding checks $762; deposits intransit $1,700; and a bank service charge $20. Determine theadjusted cash balance per bank at August 31, 2005.

  What is steve recognized gain on this transaction

Steve owns a rental property with an adjusted basis in Steve's hands of $100,000. What is Steve's RECOGNIZED gain on this transaction

  On january 1 2013 gridley corporation had 187500 shares of

on january 1 2013 gridley corporation had 187500 shares of its 2 par value common stock outstanding. on march 1 gridley

  Indicate how each item should be classified in the statement

An analysis of comparative balance sheets, the current year's income statement, and the general ledger accounts of Solomon Corp. uncovered the following items.

  What is the anticipated stock price

Justin Cement Company has had the following pattern of earnings per share over the last five years: What is the anticipated stock price

  Prepare a capital projects fund statement of revenues

Prepare a Capital Projects Fund Statement of Revenues, Expenditures, and Changes in Fund Balance for the project, including (1) the year ended December 31, 20X3

  Prepare a statement of cost of goods manufactured

Problem for Manufacturing Accounting: During July, Redard Corp's purchase of direct materials totaled $139,000; direct labor for the month was 4,200 hours.

  Compute direct labor rate and efficiency variances for june

Purchased 31,624 pounds of materials at a cost of $3.10 per pound. Compute the direct materials price and quantity variances for June

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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