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

image 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_2

Step: 3

blur-text-image_3

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

Payroll Accounting 2016

Authors: Bernard J. Bieg, Judith Toland

26th edition

978-1305665910, 1305665910, 1337072648, 978-1337072649

More Books

Students also viewed these Accounting questions

Question

What do you find the most appealing about this job/position?

Answered: 1 week ago