Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

(a) Kingston Baker's Ltd. most recent monthly contribution format income statement is given below for 6000 units Sales (6000 units) 90,000 Less variable expenses

image text in transcribedimage text in transcribed

(a) Kingston Baker's Ltd. most recent monthly contribution format income statement is given below for 6000 units Sales (6000 units) 90,000 Less variable expenses 67,500 Contribution margin 22,500 Less fixed expenses 18,000 Net Income 4,500 Calculate: (a) the company's contribution margin ratio? (2 marks) (b) the breakeven points in units and in dollar sales? (4 marks) (c) the margin of safety in units and dollar value if the company's intention is to sell 10000 units. (4 marks) (d) How many units would the company need to sell if it wishes to make a profit of $25000? (2 marks) (e) If unit sales were increased by 25% and fixed expenses were reduced by $4,000, what would be the company's expected net income? (Prepare a contribution margin income statement to represent your response) (6 marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals of Cost Accounting

Authors: William Lanen, Shannon Anderson, Michael Maher

5th edition

978-1259728877, 1259728870, 978-1259565403

More Books

Students also viewed these Accounting questions

Question

application of first law of thermodynamics

Answered: 1 week ago

Question

Describe the factors that create the retirement risk.

Answered: 1 week ago