number 4 below number 1 below value 1000 points Remo Company and Angelo Inc. are

Question

number 4 below

number 1 below

value 1000 points Remo Company and Angelo Inc. are separate companies that operate in the same industry. Following are variable costing income statements for the two companies showing their different cost structures: Angelo Remo Co. Inc. 5275.000 5275.000 200,000 125.000 $ 75.000 $150.000 35,000 110.000 5 40,000 40.000 Sales revenue Less: Variable cost Contribution margin Less: Fixed cost Net operating income Required: Calculate the break-even sales revenue for each company. (Round your "Contribution Margin Ratio" percentage to 2 decimal places (i.e. .1524-15.24%) and final answers to 2 decimal places.) Remo Co Angelo Ino Break-Even Sales Revenue

Explanation / Answer

Ans.1 Cove's break-even units 298 Cove's break-even sales 5073.8 *calculation: Break-even units   =   Fixed cost / Contribution per unit 3850 / 12.9 298.45 *Contribution per unit   = Selling price - Variable cost per unit 17 - (2.50 + 1.40 + 0.20) 12.9 Break even sales   =   Fixed cost / PV ratio 3850 / 75.88% 5073.80 *PV ratio   =   Contribution per unit / Sales * 100 12.9 / 17 *100 75.88% Ans.2 Margin of safty (units) =   Current sales - BEP sales 450 - 298 152 Ans.3 Target sales = (Fixed cost + Profit) / Contribution per unit (3850 + 2000) / 12.9 453 cakes Ans.4 Remo co. Angelo inc. Break-even sales revenue 128346.17 201649.86 *Calculation: Break even sales =   Fixed cost / Contribution margin ratio Remo co.     35000 / 27.27% 128346.17 Angelo inc. 110000 / 54.55% 201649.86 Contribution margin ratio = Contribution / sales * 100 Remo co. 75000 / 275000 * 100 27.27% Angelo inc. 150000 / 275000 * 100 54.55%

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