7.Dybala Corporation\'s produces and sells a single product. Data concerning tha
ID: 2478412 • Letter: 7
Question
7.Dybala Corporation's produces and sells a single product. Data concerning that product appear below:
90
50%
$ 90
50%
The company is currently selling 6,700 units per month. Fixed expenses are $547,700 per month. The marketing manager believes that a $7,100 increase in the monthly advertising budget would result in a 170 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
Decrease of $7,100
Decrease of $8,200
Increase of $15,300
Increase of $8,200
8.
Data concerning Wang Corporation's single product appear below: (Do not round your intermediate calculations.)
The break-even in monthly dollar sales is closest to:
$216,000
$285,120
$146,880
$432,000
9.
Data concerning Cutshall Enterprises Corporation's single product appear below:
3,540
2,141
4,915
3,792
10.
A cement manufacturer has supplied the following data:
The company's contribution margin ratio is closest to:
44.5%
60.0%
68.2%
18.7%
11.
Gonyo Inc., which produces and sells a single product, has provided the following contribution format income statement for December appears below:
Redo the company's contribution format income statement assuming that the company sells 5,200 units.
7.Dybala Corporation's produces and sells a single product. Data concerning that product appear below:
Explanation / Answer
7)
Incremental contribution from 170 units = 170 x $90 = $15300
Incremental cost from advertisement = $ 7100
Incremental profit = $15300 - $7100 = $8200
8)
Contribution margin = Sales – variable cost = $240 - $76.80 = $163.20
Contribution margin ratio = Contribution / Sales = $163.20 / $240 = 0.68
Break-even point in dollars
= Fixed cost / contribution margin ratio
= $146880 / 0.68 = $216000
9)
Contribution per unit = $225 - $98 = $127
Number of units required to be sold
= (fixed cost + target profit) / contribution per unit
= $(449640 + 32000) / $127 per unit
= 37952 units
10)
Contribution
= Sales Revenue – Variable costs
= Sales Revenue – (Variable manufacturing expense + Variable selling and administrative expense)
= $974000 – ($231000 + $158600)
= $584400
Contribution Margin Ratio = contribution / sales = $584400 / $974000 = 0.60 = 60%
11)
Selling price per unit = $305000 / 5000 = $61 per unit
Variable expense per unit = $150000 / 5000 = $30 per unit
Sales (2500 x $61) $ 1,52,500 Less: variable Expenses (2500 x $30) $ 75,000 Contribution margin $ 77,500 Less: fixed Expenses $ 1,06,000 Net Operating Income/(loss) ($ 28,500)Related Questions
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