Wesley Company manufactures and sells a single product. The company's Income statement at sales level of...
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Wesley Company manufactures and sells a single product. The company's Income statement at sales level of 27,000 units for last quarter follows: Total Sales Less: Variable expenses Contribution margin Less: Fixed expenses $1,880,eee 756,000 324,e00 263,736 Net operating income 6e, 264 Required: 1. What is the monthly break-even polnt in units sold and In sales dollars? (Round your Intermediate calculations and final answers to the nearest whole number.) Break-even Point Break-even point in units sold Break-even point in sales dollars 2 Without resorting to computations, calculate the total contribution margin at the break-even polnt for the quarter. Total contribution margin 3-a. How many units would have to be sold each quarter to earn a target profit of $21,600? Use the formula method. Units sold to attain target profit 3-b. Verify your answer by preparing a contribution format Income statement at the target level of sales. Total Unit Sales 285,338 4. Refer to the orlginal data. Compute the company's margin of safety for the quarter In units, In dollars and as a percentage of last quarter's sales. (Round "Percentage" answer to 1 declimal place, (1.e., 0.123 should be considered as 12.3%).) Units Dollars Percentage Margin of safety 5. What is the company's CM ratio? If quarterly sales decrease by $92,800 and there Is no change In fixed expenses, what would you expect the quarter's net operating Income to be? (Do not prepare an Income statement, use the CM ratio to compute your answer.) CM ratio Net operating income Wesley Company manufactures and sells a single product. The company's Income statement at sales level of 27,000 units for last quarter follows: Total Sales Less: Variable expenses Contribution margin Less: Fixed expenses $1,880,eee 756,000 324,e00 263,736 Net operating income 6e, 264 Required: 1. What is the monthly break-even polnt in units sold and In sales dollars? (Round your Intermediate calculations and final answers to the nearest whole number.) Break-even Point Break-even point in units sold Break-even point in sales dollars 2 Without resorting to computations, calculate the total contribution margin at the break-even polnt for the quarter. Total contribution margin 3-a. How many units would have to be sold each quarter to earn a target profit of $21,600? Use the formula method. Units sold to attain target profit 3-b. Verify your answer by preparing a contribution format Income statement at the target level of sales. Total Unit Sales 285,338 4. Refer to the orlginal data. Compute the company's margin of safety for the quarter In units, In dollars and as a percentage of last quarter's sales. (Round "Percentage" answer to 1 declimal place, (1.e., 0.123 should be considered as 12.3%).) Units Dollars Percentage Margin of safety 5. What is the company's CM ratio? If quarterly sales decrease by $92,800 and there Is no change In fixed expenses, what would you expect the quarter's net operating Income to be? (Do not prepare an Income statement, use the CM ratio to compute your answer.) CM ratio Net operating income
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Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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