. Anderson, Inc. has the following data: SP: $25.50; Units sold: 14,000; VC/Unit
ID: 2553688 • Letter: #
Question
. Anderson, Inc. has the following data: SP: $25.50; Units sold: 14,000; VC/Unit: S13.75; FC: $160,000 Prepare a CVP Income Statement Prepare a CVP Income Statement showing a 20% increase in SP (with costs remaining a. b. Prepare a CVP Income Statement showing a 10% increase in SP, an 8% increase in VC, and a $20,000 decrease in FC c. d. Using the data in the bullets, what is the CMUnit? CM Ratiol? c. Using the data in the bullets, what is the BE in Sales Units? 9. a Find the BE in Sales Units using the following data SP/Unit: $8.00; VC/Unit: $5.75; FC: $27,000 b. Once the company reaches BE, how much income will they have at: 15,000 units; 20,000 units; 35,000 units 10. Using the data in # 9 above, prepare sold. a CVP Income Statement assuming 14,500 units are 11. Company XYZ produces product 110, which has a SP of $125, VC/Unit of $85, and FC of $50,000. a. b. c. What is the BE in Units (Use CM Method)? What is the CM Ratio? If XYZ has sales totaling S125,000, how much of it is used to cover FC and contribute to NI? 12. Kramer Company's FC are S165,000. Their CM/Unit is S35.00. a. If Kramer wants a NI of S62,500, how many units must they sell? 13. Morrison Company's information is as follows: SP: S50; VC/Unit: S32: FC: $32,400 What is the CM Unit? a. b. What is the CM Ratio? What is the BE in Sales Units? Sales dollars? If Morrison would like a NI of $30,600, how many units must they sell? c. d. 14. Summit, Inc. expects sales of $465,000. If BE in sales dollars is $235,000: What is their Margin of Safety? What does this mean? b. a. What is their Margin of Safety Ratio? What does this mean? 15. Awicma Company sells Product 465, which has a SP of S65, VOUnit of S45, and FC of $85,000. If they expect to sell 6000 units of this product, What is their Margin of Safety? What is their Margin of Safety Ratio? a. b.Explanation / Answer
(a)CVP Income Statement
(b)
Revised Selling Price=25.5+20%=30.6
(c)
Revised SP=25.5+10%=28.05
Revised VC=13.75+8%=14.85
Revised FC=160,000-20000=140,000
44,800.00
(d) Contribution Margin(CM) per Unit=SP-VC per Unit=25.5-13.75=11.75
CM Ratio=(SP-VC)/SP =(25.5-13.75)/25.5=46.08%
(e)BE =Fixed Cost/Contribution per unit
=160,000/11.75=13,617 units
9(a)
Contribution Per unit=SP-VC=8-5.75=2.25pu
BE point=FC/Contribution per unit=27000/2.25=12000 units
(b)
Income at 15000 units= Additional units*Contribution per unit
=(15000-12000)*2.25=6750
Income at 20000 units=(20000-12000)*2.25=18,000
Income at 35000 units=(35000-12000*2.25=51,750
10
11.
(a)
BE in Units=Fixed Cost/Contribution per unit
Contribution pu=SP-VC=125-85=40
BE=50000/40=1250 units
(b)
CM Ratio=125-85/125=32%
(c)
Units Sold=125,000/125=1000 units
Contribution=Sales-VC=125,000-(85*1000)=40,000
12
(a) Desired NI=62,500 Desired Contribution=FC+Desired NI=165,000+62,500=227,500
Units to be Sold=Desired Contribution/CM/unit=227,500/35=6500 units
13
(a)CM/Unit=SP-VC=50-32=18
(b)CM Ratio=18/50=36%
(c) BE=32,400/18=1800units BE Sales=1800*50=90,000
(d)desired Contribution=30600+32400=63000
Units to be sold=63000/18=3500units
14. Margin of Safety is the excess of actual sales over break even sales.
(a) MOS=Expected/Actual Sales-BE Sales=465,000-235,000=230,000
(b)MOS Ratio=MOS/Actual Sales=230,000/465,000=49%.This ratio determines the level by which sales can drop before a business incurs losses
15.
(a)
Contribution=SP-VC=65-45=20
BE units=Fixed Cost/Contribution per Unit=85000/20=4250
BE Sales=4250*65=276,250
Expected Sales=6000*65=390,000
MOS=390,000-276,250=113,750
(b) MOS Ratio=113750/390000=29%
Particulars Working Amount Sales (25.5X 14000) 357,000.00 Less: Variable Costs(VC) (13.75*14000) 192,500.00 Contribution (Sales-VC) 164,500.00 Less: Fixed Costs 160,000.00 Income 4,500.00Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.