Business, 28.08.2020 14:01 Webber07

Viejol Corporation has collected the following information after its first year of sales. Sales were $1,440,000 on 120,000 units, selling expenses $210,000 (40% variable and 60% fixed), direct materials $504,000, direct labor $169,400, administrative expenses $276,000 (20% variable and 80% fixed), and manufacturing overhead $382,000 (70% variable and 30% fixed. Top management has asked you to do a CVP analysis so that it can make plans for the coming year. It has projected that unit sales will increase by 10% next year. (a) Compute (1) the contribution margin for the current year and the projected year, and (2) the fixed costs for the current year. (Assume that fixed costs will remain the same in the projected year.)
(b) Compute the break-even point in units and sales dollars for the current year.
(c) The company has a target net income of $200,000. What is the required sales in dollars for the company to meet its target?

Answers: 1

Show answers

Answers

Answer from: king845

a. (1). 25 % and 25 %

a. (2). $461,400

b. 153,800 units

c. $1,845,600

d. $2,645,600

Explanation:

Contribution margin = Contribution / Sales × 100

Where

Contribution margin = Sales - Variable Cost

Current

Sales $1,440,000

Variable Costs :

Selling expenses $84,000

Direct materials $504,000

Direct labor $169,400

Administrative expenses $55,200

Manufacturing Overheads $267,400 ($1,080,000)

Contribution $360,000

Contribution margin = $360,000 / $1,440,000 × 100

= 25 %

Projected

Sales ( $12 × 120,000 × 1.10) $1,584,000

Variable Costs :

Selling expenses ($84,000/120,000 × 132,000) ($92,400)

Direct materials ($504,000/120,000 × 132,000) ($554,400)

Direct labor ($169,400/120,000 × 132,000) ($186,340)

Administrative expenses ($55,200/120,000 × 132,000) ($60,720)

Manufacturing Overheads ($267,400/120,000 × 132,000) ($294,140)

Contribution $396,000

Contribution margin = $396,000 / $1,584,000 × 100

= 25 %

Fixed Costs Calculation :

Selling expenses ($210,000 × 60%) $126,000

Administrative expenses ($276,000 × 80%) $220,800

Manufacturing Overheads ($382,000 × 30%) $114,600

Total Fixed Cost $461,400

Break Even Point (Units) = Fixed Costs ÷ Contribution per unit

= $461,400 ÷ ($360,000 ÷ 120,000)

= 153,800 units

Break Even Point (Dollars) = Fixed Cost ÷ Contribution Margin

= $461,400 ÷ 0.25

= $1,845,600

Sales to Reached Target Profit = (Fixed Cost + Target Profit) ÷ Contribution Margin

= ($461,400 + $200,000) ÷ 0.25

= $2,645,600

Answer from: Quest

$527.7.if the following was the question $527.7 is the answer.students who are trying to raise funds have an agreement with a local pizza chain. the chain has agreed to sell them pizzas at a discount, which the students can then resell to families in the local community for a profit. it is expected that of the 500 families in the community, at most 70% will buy pizza. based on a survey of their personal preferences, the students believe that they should order no more than 120 cheese pizzas, no more than 150 pepperoni pizzas, and no more than 100 vegetarian pizzas. they also want to make sure that at least 20% of the total pizzas are cheese and at least 50% of the pizzas are pepperoni. they make a profit of $1.45, $1.75, and $1.98, respectively, for each cheese, pepperoni, and vegetarian pizza they resell. how many pizzas of each type should they buy?

Answer from: Quest

The answer is product modification

Another question on Business

Business, 22.06.2019 06:40

Self-interest achieve society’s economic goals because producers know which goods consumers want the most. as consumers and producers exercise their freedom to act in their own self-interest, markets will produce the desired goods at the lowest possible cost. consumers and producers both operate based on society’s economic goals. consumers know which goods can be produced at the lowest cost. there is a wide variety of desired goods and services in a market system because producers determine what to produce. consumers change their minds frequently. there is always a need to produce something new and improved. individual wants are diverse. what is produced is ultimately determined by consumers, because if the goods offered are not what consumers want, consumers will not buy them. producers, because they are driven by profits. producers, because they determine what to produce. consumers, because they participate in marketing surveys.

Answers: 2

Answer

Business, 22.06.2019 19:50

Which of the following would create the most money? the initial deposit is $6,500 and the required reserve ratio is 20 percent. the initial deposit is $3,000 and the required reserve ratio is 10 percent. the initial deposit is $7,500 and the required reserve ratio is 25 percent. the initial deposit is $4,500 and the required reserve ratio is 15 percent.

Answers: 1

Answer

Business, 22.06.2019 22:30

Ski powder resort ends its fiscal year on april 30. the business adjusts its accounts monthly, but closes them only at year-end (april 30). the resort's busy season is from december 1 through march 31. adrian pride, the resort's chief financial officer, the museums a close watch on lift ticket revenue and cash. the balances of these accounts at the end of each of the last five months are as follows:

Answers: 3

Answer

Business, 23.06.2019 00:00

How did the change in textile production affect employment in spinning and weaving for adults and children?

Answers: 1

Answer

You know the right answer?

Viejol Corporation has collected the following information after its first year of sales. Sales were...

Questions