Griffin\'s Steel Parts produces parts the auomobile i dustry. The company has mo
ID: 2340417 • Letter: G
Question
Griffin's Steel Parts produces parts the auomobile i dustry. The company has morely tod op erses of 640 000 and a contribution man n of B0% ofre er as Read the requirements The breakaven saies in dolilars is 800.000 Requirement 2. Use the contribution margin ratio to project operating income (or loss) if revenues ane $560,000 and if they are $1,000,000 First seilect the labels to calculate projected operating income. Then, calculrjedled income (orlo) i revanure $60000 Finaly, caculala projecded income lor lossv Finaly, calculate projected income (or loss) if revenues are $1,000 ,0000 contribution margin ratio as a whole percent Enter losses with a minus sign or parentheses.) Griffin's Steel Parts Operating Income Projection at Different Sales Levels If revenues 1. Compute Griffin's Steel Parts monthly breakeven sales in dollars 2. Use the conribution margin ratio to project operating income (or loss) if are $560,000 Sales revenue 60000 revenues are $560,000 and if they are $1,000,000 Do the results in Requirement 2 make sense given the breakeven sales you x Contribution margin ratio computed in Requirement 17 Explan Contribution margin Fxed oosts Operating income (oss) 40000 Print DoneExplanation / Answer
Solution 2:
Solution 3:
Yes, results in requirement 2 make sense as they are in line with breakeven point computed in first part. As breakeven sales is $800,000, therefore operating income projection resulted in losses at revenue of $560,000 i.e. below the breakeven point. Further operating income projection resulted in profit when revenue is $1,000,000 i.e. above the breakeven point.
Griffin Steel Parts Operating income projection At different sales levels Particulars If revenues are $560,000 Revenues $560,000.00 Contribution margin ratio 80% Contribution margin $448,000.00 Fixed costs $640,000.00 Net Operating income -$192,000.00Related Questions
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