1. Complete a CVP Income Statement using the following data: Sales: $450,250; To
ID: 2547924 • Letter: 1
Question
1. Complete a CVP Income Statement using the following data: Sales: $450,250; Total VC: $375,000; Total FC: $98,000 2. Jordan Company sells a product, Product 250, which has the following data: SP: S50.75; VC/unit: $25.75; Total FC: $110,000 a. What is the CM/unit? b. What is the BE in units c. What is the BE in dollars? 3.Goldman Company has sales of $1,200,000 and total VC of $695,000 a. What is Goldman Company's CM? b. If they sold 25,000 units, what is the CM/Unit? c. What is the SP/Unit? 4. Aldredge Company sells Product Z for $425. VC/unit are $225 and FC are $135,000 a. b. c. d. What is the CM/unit? What is the BE in units? What is the CM Ratio? Using the CM Ratio, what is the BE in dollars 5. Using the data in # 4 above, prepare a CVP Income Statement assuming 990 units are sold. 6. Keaubie Company produces product ABC, which has a SP of $95, VC/Unit of S45, and FC of $100,000 a. What is the BE in Units (Use CM Method)? b. What is the CM Ratio? If XYZ has sales totaling $235,000, how much of it is used to cover FC and contribute to NI? c. 7. Morrison Company's information is as follows: SP: $200; VC/Unit: $85; FC: $575,000 a. b. c. d. What is the CM/Unit? What is the CM Ratio? What is the BE in Sales Units? Sales dollars? If Morrison would like a NI of $402,500, how many units must they sell?Explanation / Answer
1.
Income statement
2.
a. Contribution margin per unit = Selling price per unit - Variable cost per unit
= 50.75 - 25.75
= 25
b. Breakeven point in units = Fixed costs / Contribution margin per unit
= 110,000 / 25
= 4,400 units
c. Contribution margin ratio = Contribution margin per unit / Selling price per unit
= 25 / 50.75
= 49.26%
Breakeven point in dollars = Fixed costs / Contribution margin ratio
= 110,000 / 49.26%
= 223,305
3.
a. Contribution margin = Sales - Variable costs
= 1,200,000 - 695,000
= 505,000
b. Contribution margin per unit = Contribution margin / Number of units
= 505,000 / 25,000
= 20.2 per unit
c. Selling price per unit = Sales / Number of units
= 1,200,000 / 25,000
= 48 per unit
4.
a. Contribution margin per unit = Selling price per unit - Variable cost per unit
= 425 - 225
= 200
b. Breakeven point in units = Fixed costs / Contribution margin per unit
= 135,000 / 200
= 675
c. Contribution margin ratio = Contribution margin per unit / Selling price per unit
= 200 / 425
= 47.06%
d. Breakeven point in dollars = Fixed costs / Contribution margin ratio
= 135,000 / 47.06%
= 286,868
5.
Income Statement
6.
a. Contribution margin per unit = Selling price per unit - Variable costs per unit
= 95 - 45
= 50
Breakeven point in units = Fixed costs / Contribution margin per unit
= 100,000 / 50
= 2,000 units
b. Contribution margin ratio = Contribution margin per unit / Selling price per unit
= 50 / 95
= 52.63%
c. Sales = 235,000
Contribution margin = Sales * Contribution margin ratio
= 235,000 * 52.63%
= 123,681
123,681 of sales is used to cover Fixed costs and contribute to Net income
7.
a. Contribution margin per unit = Selling price per unit - Variable cost per unit
= 200 -85
= 115
b. Contribution margin ratio = Contribution margin per unit / Selling price per unit
= 115 / 200
= 57.5%
c. Breakeven point in units = Fixed costs / Contribution margin per unit
= 575,000 / 115
= 5,000 units
Breakeven point in dollars = Fixed costs / Contribution margin percentage
= 575,000 / 57.5%
= 1,000,000
d. Units to be sold to attain desired income = (Fixed costs + Desired income) / Contribution margin per unit
= (575,000 + 402,500) / 115
= 8,500 units
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