Use this information to determine: For FY 2016 Bravo Company\'s CVP format Incom
ID: 2521971 • Letter: U
Question
Use this information to determine:
For FY 2016 Bravo Company's CVP format Income Statement is as follows: Bravo Company Income Statement (CVP format For the Year Ended 12/31/16 Sales (100 units) $10,000 Variable Costs: $1,500 1,400 1,000 Direct Labor Direct Materials Factory Overhead (variable) Selling Expenses (variable) Administrative Expenses (variable) 600 500 Total Variable Expenses Contribution Margin Fixed Costs: 5000 $5,000 Factory Overhead (fixed) Selling Expenses (fixed) Administrative Expenses (fixed) $500 1,000 1,000 Total Fixed Expenses 2.500 Net Income (aka Operating Income) $2,500 Bravo utilizes a JIT production system and there are no Raw Materials, Work-in-Process of Finished Goods inventories. Bravo Company expects that al costs will remain the same for FY 2017 with the exception of fixed factory overhead which is budgeted to increase by $1,700. Use this information to determine: 1. FY 2016 Cost of Goods Sold 2. FY 2016 breakeven point in units 3. FY 2016 breakeven point in dollar of sales 4. FY 2017 breakeven point in units 5. FY 2017 dollar Sales at breakeven point Round any total dollar value to the nearest whole dollar & enter as whole dollars only. Round any unit dollar value to the nearest penny & enter with both dollarís) & cents. Round any unit non-dollar decimal numbers to the next higher whole number and enter as a whole number.)Explanation / Answer
Answer 1
FY 2016 Cost of Goods Sold = Direct Marterial + Direct Labour + Fixed overhead
= $1,500 +$1,400 + $1,000 + $500 = $4,400
Answer 2
Contribution per unit = $5,000 /100 units = $50 per unit
FY 2016 Break even point in units = Total Fixed costs / Contribution per unit = $2,500 / $50 = 50 units
Answer 3
FY 2016 Break even point in dollars = Break even point in units * Selling price per unit = 50 units * $100 = $5,000
Answer 4
Fixed cost for FY 2017 = $2,500 + $1,700 = $4,200
FY 2017 Break even point in units = $4,200 / $50 = 84 units
Answer 5
Y 2017 Break even point in units = 84 units * $100 = $8,400
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