15. Jackson Company\'s operating results for last year are given below: Sales Se
ID: 2600737 • Letter: 1
Question
15. Jackson Company's operating results for last year are given below: Sales Selling price Variable expense Fixed expenses. 2,400 units $40 per unit $14 per unit $19,500 e company's fixed expenses decrease by 20% next year, the break-even point will If the change from its previous level by: A. 150 unit increase B. 360 unit decrease C. 150 unit decrease D. no change in the break-even point The following information is for Q16-Q17. Legard Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant-day. During January, the kennel budgete for 2,600 tenant-days, but its actual level of activity was 2,620 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for January: Data used in budgeting: Fixed Variable element element per per month tenant-day $35.50 Wages and salaries..3,500 Expendables Facility expenses.8,100 Administrative expenses... 7.90 1,100 13.30 3.00 0.10 6,400 Total expenses Actual results for January Kevenue $92,260 Wages and salaries$23,938 $36,986 $15,560 Administrative expenses.S6,942 Facility expenses...Explanation / Answer
Answer:-15)-If the company’s fixed expenses decreases by 20% next year, the break even point will change from its previous level by:- 150 unit decreases (option C).
Explanation:-Break even point (in units) last year= Fixed costs/Contribution margin per unit
= $19500/$26 per unit
= 750 units
Next year fixed cost = $19500- ($19500*20%)
= $19500 - $3900
= $15600
Break even point (in units) next year = $15600/$26 per unit = 600 units
Where:- Contribution margin per unit= Selling price per unit – Variable expense per unit
=$40 per unit - $14 per unit = $26 per unit
16)-
Legard Kennel Flexible Budget Performance Report For the month ended January Particulars Flexible Budget Actual Results Variances Remark $ $ $ Revenue 2620 tenant days*$35.50 per tenant days 93010 92260 -750 Unfavourable Less:- Variable portion expenses Wages & salaries 2620 tenant days*$7.90 per tenant days 20698 20438 260 Favourable Expendables 2620 tenant days*$13.30 per tenant days 34846 35886 -1040 Unfavourable Facility expenses 2620 tenant days*$3.00 per tenant days 7860 7460 400 Favourable Administrative expenses 2620 tenant days*$.10 per tenant days 262 542 -280 Unfavourable Less: Fixed portion Expenses Wages & salaries 3500 3500 0 No variance Expendables 1100 1100 0 No variance Facility expenses 8100 8100 0 No variance Administrative expenses 6400 6400 0 No variance Income from opreations 10244 8834 -1410 UnfavourableRelated Questions
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