Question
(A) Sampson Products distributes a single product, a woven basket whose selling price is $8 and whosevariable cost is $6 per unit. The company's monthly
(A) Sampson Products distributes a single product, a woven basket whose selling price is $8 and whosevariable cost is $6 per unit. The company's monthly fixed expense is $5,500.
Required:
1. Solve for the company's break-even point in unit sales using the equation method.
2. Solve for the company's break-even point in sales dollars using the equation method and the
CM ratio.
3. Solve for the company's break-even point in unit sales using the formula method.
4. Solve for the company's break-even point in sales dollars using formula method and the CM ratio.
(B) The management of Osman Copy, a photocopying center located on University Avenue, has compiled the following data to use in preparing its budgeted balance sheet for next year:
Ending Balances
Cash . . . . . . . . . . . . . . . . . . . . . . . . . ?
Accounts receivable . . . . . . . . . . . . . $6,500
Supplies inventory . . . . . . . . . . . . . . . $2,100
Equipment . . . . . . . . . . . . . . . . . . . . . $28,000
Accumulated depreciation . . . . . . . . . $9,000
Accounts payable . . . . . . . . . . . . . . . $1,900
Common stock . . . . . . . . . . . . . . . . . $4,000
Retained earnings . . . . . . . . . . . . . . ?
The beginning balance of retained earnings was $21,000, net income is budgeted to be $8,600, and dividends are budgeted to be $3,500.
Required:
Prepare the company's budgeted balance sheet.
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